DTN Before The Bell-Livestock

GENERAL COMMENTS

Livestock futures remain stuck in a narrowly mixed trade as lack of activity is seen early Friday morning ahead of the holiday weekend. Very little market activity is likely to be seen during the session as many traders seem to have exited the market following the end of the month and will remain out of the market until the middle of next week. Corn markets are trading lower in light trade activity. The stock market is trading mixed in light early trade. Dow Jones is 58 points higher while Nasdaq is down 2 points.

LIVE CATTLE:

Opening call: Mixed. Early moves in live cattle trade is focused on inactivity with very little market movement as most traders remaining out of the market ahead of the market. This will likely keep most traders on the sidelines as fundamentals remain weak with uncertainty still the main concern through the complex. Nearby futures have posted narrow gains in early minutes of trade, while deferred futures have held narrow losses. This lack of market movement could quickly leave prices fluctuating in a narrow to moderate range over the near future. Cash cattle activity remains undeveloped early Friday morning. Although overall trade activity seems to be rather light at this point in both the North and South, trade may be done for the week in front of the holiday weekend. Open interest Thursday liquidated 1,515 positions (314,834). Spot August lost 145 positions (0) and October contracts lost 4,251 positions (140,314). DTN projected slaughter for Friday is 114,000 head.

FEEDER CATTLE:

Opening call: Mixed. Mixed trade is slowly stepping into the market on the first trading session of September. Traders are unwilling to establish strong buyer support ahead of the holiday weekend after seeing further market pressure at the end of the month. Very little market direction of trade volume is likely to develop either before or after the holiday weekend with traders taking a wait and see approach to the cattle market and all markets to see the direction other traders take before being willing to step back into the complex. Cash lean index for 8/30 is $142.91, down 0.43. Open interest Thursday added 770 position (54,440).

LEAN HOGS:

Opening call: Mixed. Extreme light moves seen early Friday morning indicate the overall lack of direction ahead of the holiday weekend. This could limit not only volume through the upcoming trading session, but also through the upcoming week as traders focus on increased market direction of cash and technical market moves during early September. With prices bouncing sharply higher in late August, it appears that traders seem to be willing to bring some stability to the market at this point. October futures are holding near $61 per cwt which could become a threshold for renewed commercial interest for fundamental support. Cash bids 50 cents to $1.50 lower with bids scattered through the range. Open interest Thursday liquidated 671 positions (246,566). Spot month October slipped 3,678 positions (96,924) and December added 3,222 positions (65,079). Cash lean index for 8/30 is $73.52, down 0.93. DTN projected slaughter for Friday is 408,000 head. Saturday runs are expected at 108,000 head.

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

(SK)

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