DTN Before The Bell-Livestock

GENERAL COMMENTS

Livestock futures remain lightly traded in a narrow range early Wednesday morning as the focus has moved to outside markets for the time being. This may limit widespread moves through the livestock market through most of the morning as prices chop around within the current sideways price patterns. Corn markets are higher in light early trade. Stock markets are higher, Dow Jones is 156 points higher. Nasdaq is up 47 points.

LIVE CATTLE:

Open: steady to 30 cents higher. Firm gains have quickly moved into live cattle trade as traders attempt to counter the market losses seen Tuesday. Little directional shift has developed in fundamental markets, although the focus on the ability to hold within the sideways trading pattern seen over the last few weeks is helping to bring some buyers back to the table. Outside markets will be a major focus through the entire complex with traders closely monitoring the direction of grain trade as well as financial markets through the next few days. Cash cattle markets remain quiet, although packer interest is expected to improve through the next couple of days. A few early asking prices are seen Wednesday morning with prices listed at $119 and higher live and $187 dressed. It is likely to be Thursday or Friday before active trade is seen in any area. Open interest Tuesday gained 1,748 positions (344,664). Spot month December contracts lost 1,532 positions (35,725) and February contracts added 2,041 positions (134,618). DTN projected slaughter for Wednesday is 119,000 head.

FEEDER CATTLE:

Open: Mixed. Single-digit losses are seen in nearby feeder cattle futures early Wednesday morning. But limited buyer activity has slowly trickled into the rest of the complex as buyer support is focusing on renewed interest in live cattle trade and continued expectations that grain markets will remain sluggish, limiting production costs through early 2019. Limited trade is likely to be seen through most of the morning with traders putting more emphasis on outside market moves. Cash index for 11/23 is listed at $149.86, up 1.59. Open interest Tuesday fell 49 positions (48,993).

LEAN HOGS:

Open: Mixed. Very limited market direction is seen through the entire complex with most contracts breaking away from the moderate to wide market shifts seen through the week, as prices are hovering in a narrowly mixed range from 12 cents lower to 10 cents higher in most contract months. Traders are looking for market stability as many try to assess longer term pork demand expectations and try to sort out just how outside markets will play into the hog complex through the end of the year. But for now, limited buyer support is helping to bring some buyers back into the complex, although expected gains are likely to remain very limited. Cash hog trade Wednesday is steady to $1.00 lower. Most bids are seen steady to 50 cents lower. Open interest fell 2,214 positions (224,142). Spot month December fell 1,606 positions (32,474) and February added 50 positions (77,411). Cash lean index for 11/23 is $57.44 down 0.40. DTN projected slaughter for Wednesday is at 477,000 head. Saturday runs are expected at 207,000 head.

Rick Kment can be reached at rick.kment@dtn.com

(BAS)

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