DTN Before The Bell-Livestock

Gains Redevelop Through Lean Hog Complex

Rick Kment
By  Rick Kment , DTN Analyst
(DTN photo by Nick Scalise)
GENERAL COMMENTS

Light pressure is seen through cattle trade with live cattle futures hovering in a narrow trading range from 10 to 20 cents lower in most contract months. Firming buyer support is redeveloping in lean hog trade as commercial buyer support is steadily moving back into the market. Corn markets are higher in light early trade. Stock markets are lower. Dow Jones is 330 points lower with Nasdaq down 112 points.

LIVE CATTLE:

Open: Steady to $0.20 lower. Market direction early Thursday morning remains sluggish with prices hovering in a narrow 10 cent trading range in most contract months. This lack of direction in the complex carries the uncertainty that was seen early Wednesday morning, but there is also some underlying support building based on fundamental support in the complex. The pull back from contract highs over the last couple of trading sessions seems to be have only limited momentum, allowing traders to look for renewed support through the month of January. Continued support is being sought from beef values with the expectation that additional gains will develop in the morning report. Cash cattle interest remains sluggish with asking prices at $125 to $126 live and $200 dressed. At this point bids are still undeveloped, but packer interest should start improving through the morning. Most of the trade is likely to be pushed off until sometime Friday. Open interest Wednesday increased 4,107 positions (380,252). Spot month February contracts lost 3,087 positions (131,054) and April contracts gained 2,820 positions (114,040). DTN projected slaughter for Thursday is 120,000 head.

P[L1] D[0x0] M[300x250] OOP[F] ADUNIT[] T[]

FEEDER CATTLE:

Open: $0.10 to $0.30 lower. Limited pressure has found its way back to the cattle complex with feeder cattle trade holding narrow losses based on the potential to spark renewed buyer support through the end of the week in live cattle trade as traders continue to focus on firming demand through early 2019. Cash index for 1/01 is listed at $144.49 down $0.15. Open interest Wednesday gained 194 positions (48,248).

LEAN HOGS:

Open: $0.40 to $0.60 higher. Limited support trickled into the lean hog futures complex once again as traders continue to expand the early support seen over the last couple of trading sessions. The focus on firming cash values, and expectations that additional commercial buyer support will build on recent gains is helping to move prices off of recent market lows. February futures have pushed prices nearly $2 per cwt above short term support levels seen during the Christmas week, allowing for increased momentum to develop in all nearby lean hog trade. Cash hog trade is steady to $1.00 higher. Most bids are steady to firm. Open interest added 1,610 positions (219,569). February fell 483 positions (81,683) and April gained 1,212 positions (58,746). Cash lean index for 12/31 is $53.05 down 0.15. DTN projected slaughter for Thursday is 477,000 head. Saturday runs are expected at 420,000 head.

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

(BAS)

P[L2] D[728x90] M[320x50] OOP[F] ADUNIT[] T[]
P[R1] D[300x250] M[300x250] OOP[F] ADUNIT[] T[]
P[R2] D[300x250] M[320x50] OOP[F] ADUNIT[] T[]
DIM[1x3] LBL[] SEL[] IDX[] TMPL[standalone] T[]
P[R3] D[300x250] M[0x0] OOP[F] ADUNIT[] T[]

Rick Kment