DTN Before The Bell-Livestock

GENERAL COMMENTS

Limited activity is seen in all livestock markets with nearby live cattle and hog futures holding moderate gains of 20 to 50 cents per cwt during the opening minutes of trade. Limited pressure in deferred contracts has more to do with lack of market activity than any other factor. Markets will remain closed Tuesday for the New Year's holiday, allowing limited activity on the last trading session of 2018. Corn markets are lower in light early trade. Stock markets are higher. Dow Jones is 223 points higher with Nasdaq up 55 points.

LIVE CATTLE:

Open: Mixed. Limited activity and market volume is seen early Monday morning. The upcoming holiday Tuesday has limited many traders, which should keep prices sluggish during the next few hours. Nearby live cattle futures are holding prices 10 to 50 cents higher in reaction to strong cash market support last week. Deferred futures are trading 10 to 40 cents lower. The losses in deferred futures has to do more with overall market inactivity than any longer term market direction Monday. Cash cattle markets are expected to remain silent until midweek as packers and feedlot managers return from the New Year's Holiday. The sharply higher prices last week is helping to solidify the expectations that market support may continue to develop through early January. Open interest Friday increased 8,113 positions (370,533). Spot month December contracts lost 535 positions (292) and February contracts gained 1,304 positions (135,257). DTN projected slaughter for Friday is 117,000 head.

FEEDER CATTLE:

Open: 5 to 15 cents lower. Limited activity is developing Monday morning in what is expected to be a very lightly traded market session. Despite the firm support seen last week in live cattle and cash cattle markets, feeder cattle trade has been reluctant to draw significant market support back into the complex. This may add some additional pressure back into the complex, allowing for narrow Monday morning losses. The narrow price moves are likely to keep the direction of the market unchanged until after the holiday break. Cash index for 12/27 is listed at $147.26 up $0.06. Open interest Friday fell 387 positions (48,166).

LEAN HOGS:

Open: Mixed. Light to moderate price support is seen early Monday morning with increased development in the first few minutes of trade. With markets closed Tuesday, it is expected that only limited volume will be seen during the Monday trading session, although markets do not close early due to the holiday. Support in nearby contracts is being offset by narrow losses in deferred contract months. This is allowing for light pressure to be seen in summer and fall contracts based on uncertainty that still exists surrounding demand growth for pork. Cash hog trade is steady to $1.00 higher. Most bids are steady. Open interest added 2,906 positions (211,199). February added 360 positions (78,954) and April gained 1,621 positions (54,932). Cash lean index for 12/27 is $53.11 down 0.01. DTN projected slaughter for Monday is 365,000 head.

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

(BAS)

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