DTN Before The Bell-Livestock

GENERAL COMMENTS

Firm gains are seen across livestock futures following widespread market optimism seen in outside markets following trade talks between China and the U.S. over the weekend. Early triple-digit gains in the lean hog complex is the main focus in the complex as the pork market is the meat market most heavily impacted by China trade. Corn markets are higher in light early trade. Stock markets are higher, Dow Jones is 440 points higher Nasdaq is up 124 points.

LIVE CATTLE:

Open: 30 to 50 cents higher. Optimistic but cautious trade is seen through the live cattle trade early Monday morning. Most of the market firmness is based on buyer support in other markets helping to spark spillover buying into the live cattle trade. Although there still seems to be firm gains developing in the complex through the first few minutes of trade, overall volume remains light as traders focus on the ability for outside markets to hold post-Summit gains early in the week. Cash cattle interest is quiet following late Friday trade last week. The ability to keep prices steady to $1 per cwt higher from the previous week is helping to spark some additional underlying support going into the month of December. Bids and asking prices are expected to remain undeveloped as show list distribution and inventory taking will take precedent. Open interest Friday fell 497 positions (339,935). Spot month December contracts lost 962 positions (30,000) and February contracts gained 1,605 positions (136,933). DTN projected slaughter for Monday is 118,000 head.

FEEDER CATTLE:

Open: 40 to 70 cents higher. Buyer support has moved into all contracts early in the session with the focus on the positive trade talks coming out of the meeting with China on Saturday evening. Although any trade changes will directly impact other commodity markets much more than the beef market, live cattle and feeder cattle futures are expected to benefit based on the overall support in the complex and trade optimism associated with the potential for increased product movement of any meat markets. It is still uncertain how feeder cattle traders will respond to higher feed prices, as the corn and soybean markets seem to be the most actively supported shift early Monday. Cash index for 11/29 is listed at $147.13, down $0.34. Open interest Friday gained 1,183 positions (49,763).

LEAN HOGS:

Open: 30 cents to $1 higher. Firm early-week buyer support is quickly moving into most markets as traders take into account what is seen as positive news following the G20 Summit and trade talks that developed between the U.S. and China. The focus on a tariff truce seems to be the main focus in the complex as this may re-open the door for pork exports into China. Although there still is some major heavy lifting to be done for things to be permanent, and get through all of the issues, the optimism on a positive first step after very little good news over the last few months is sparking buyer interest. Cash hog trade Monday is steady to $1.00 lower. Most bids are seen steady to weak. Open interest fell 3,220 positions (219,219). Spot month December fell 2,914 positions (25,880) and February lost 843 positions (77,840). Cash lean index for 11/29 is $56.42 down 0.14. DTN projected slaughter for Monday is at 476,000 head.

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

(BAS)

Copyright 2018 DTN/The Progressive Farmer. All rights reserved.