DTN Before The Bell-Livestock

Light to Moderate Gains Trickle Into Cattle Futures

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

Light to moderate buyer activity is redeveloping in cattle trade early Thursday morning with the focus on moving steady commercial buying activity through the nearby contracts. This is helping to solidify recent market activity across the entire complex as the cattle trade continues to be focused on firm demand support despite uncertainty in strong upcoming supply levels. Hog markets remain mixed as traders try to build in some stability to the market through the end of the week. Corn markets are trading higher in light trade activity. The stock market is trading mixed in light early trade. Dow Jones is 3 points higher while Nasdaq is down 25 points.

LIVE CATTLE:

Opening call: Steady to 50 cents higher. Firm nearby gains are seen in live cattle trade early Thursday morning with the focus on spillover support moving back into the complex. This may help to draw additional commercial buying back into the complex. Deferred futures are holding narrow losses, although the complex remains generally firm given the overall support seen in feeder cattle prices. Cash cattle markets are expected to see additional packer interest moving into the market Thursday morning. This should help to generate trade at some point over the next day or so, although feeders continue to remain reserved at this point as they are looking for an opportunity to try to bring some stability to the complex. Open interest Tuesday added 3,270 positions (322,772). Spot October lost 6,955 positions (96,846) and December contracts added 6,972 positions (112,489). DTN projected slaughter for Thursday is 118,000 head.

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FEEDER CATTLE:

Opening call: Steady to 50 cents higher. Light to moderate buyer support is slowly developing in feeder cattle futures early Thursday morning. This continued slow but steady commercial support in the market may help to spark additional moves as prices inch toward the $150 per cwt level. If nearby contracts move past this level, it is likely that renewed buyer activity may develop through the end of the week based solely on traders focusing even number levels. Cash lean index for 9/12 is $149.02, up 0.05. Open interest Wednesday added 452 position (51,951).

LEAN HOGS:

Opening call: Mixed. Light trade is slowly developing across lean hog futures trade which is keeping prices in a narrow trading range through most of the morning. This may limit additional direction through the rest of the week as hog futures will focus on outside market direction as well as potential fundamental moves that could keep prices range bound in the current market level. Cash bids are 50 cents to $1.50 lower with bids scattered through the range. Open interest Wednesday added 2,322 positions (251,657). Spot month October slipped 4,381 positions (68,758) and December added 5,927 positions (93,708). Cash lean index for 9/12 is $67.37, unchanged. DTN projected slaughter for Thursday is 450,000 head. Saturday runs are expected to be at 180,000 head.

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

(SK)

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Rick Kment