DTN Before The Bell-Livestock

GENERAL COMMENTS

Moderate to strong follow-through buyer support has moved into cattle futures as traders focus on moving through short term technical resistance levels based on commercial buying activity moving back into the complex. Mixed trade is seen in lean hog futures as prices have moderated following the Thursday correction. Corn markets are trading higher in light trade activity. The stock market is trading mixed in light early trade. Dow Jones is 18 points higher while Nasdaq is down 11 points.

LIVE CATTLE:

Opening call: Steady to 50 cents higher. Light to moderate buyer interest is slowly developing early Friday morning with traders focusing on recent support which had quickly and aggressively moved into the complex. This has helped to draw traders back into the complex, with the focus on additional market support in all contracts. The expectation that buyers are willing to not only quickly follow the upward surge of the feeder cattle market, but also focus demand shifts over the next few months despite the current supply levels is helping to offset the recent market softness in the cash values. Cash cattle activity remains quiet with very little direction is developing yet Friday morning. Even the movement of bids seen Thursday are finding a hard time bringing packers back to the table early Friday morning. Asking prices are still holding at $107 to $108 live and $168 to $170 dressed. Open interest Thursday added 5,061 positions (323,133). Spot October lost 1,409 positions (128,899) and December contracts added 3,355 positions (92,920). DTN projected slaughter for Friday is 117,000 head.

FEEDER CATTLE:

Opening call: 50 cents to $1 higher. Follow through support is quickly moving into the feeder cattle trade with additional technical buying activity seen Friday morning. Even though no support is yet seen in cash markets, and there are still questions about if the beef values will find much short term momentum, buyers have quickly caught the mission of the higher moving price levels and are moving toward $147 per cwt in nearby contracts. Cash lean index for 9/6 is $147.05, up 1.30. Open interest Thursday added 183 position (50,827).

LEAN HOGS:

Opening call: Mixed. Following the strong triple-digit pullback in futures trade Thursday, lean hog traders are taking a much more subdued approach to the market late in the week. This is creating the potential for end of the week stability to redevelop ahead of the weekend as traders may step back into the market with markets moving in either direction. October futures are leading the market lower, although losses have been limited to 25 cent per cwt while mixed trade has been hovering on either side of unchanged in other nearby contracts. Cash bids steady to $2.00 lower with bids scattered through the range. Open interest Thursday added 55 positions (249,061). Spot month October slipped 3,250 positions (88,263) and December added 2,777 positions (74,416). Cash lean index for 9/6 is $69.37, down 0.96. DTN projected slaughter for Thursday is 445,000 head. Expectations for Saturday's procurement runs are at 390,000 head.

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

(SK)

Copyright 2017 DTN/The Progressive Farmer. All rights reserved.