DTN Before The Bell-Livestock

GENERAL COMMENTS

Mixed trade in a narrow range is defining the entire livestock futures complex early Friday morning. After a wide market shift in each of the cattle and hog markets through the week, traders seem to be taking a breather as the overall direction appears to be unchanged at the end of the week. Corn markets are trading higher in light trade activity. The stock market is trading higher in light early trade. Dow Jones is 33 points higher while Nasdaq is up 2 points.

LIVE CATTLE:

Opening call: Mixed. Nearby live cattle futures are hovering in a narrow range just above unchanged early Friday morning with very little momentum developing across the complex. The lack of direction in cash markets and unsettled beef values is keeping futures trade generally choppy through the end of the week and willing to hover in the wide range bound market level seen over the last couple of weeks. Cash cattle remains quiet with bids expected to actively redevelop through the morning. With bids seen generally steady in some areas Thursday, there is still a $4 to $5 per cwt gap between bids and asking prices that need to be closed before business can get accomplished for the week. Packers appear to be short bought and willing to get deals done at higher prices by the end of the week, but how aggressive prices will become is still unknown at this point. Open interest Thursday added 4,024 positions (326,632). Spot October lost 8,481 positions (88,283) and December contracts added 7,433 positions (119,862). DTN projected slaughter for Friday is 116,000 head.

FEEDER CATTLE:

Opening call: Mixed. Feeder cattle trade has taken a breather at the end of the week with early trade Friday hovering on either side of unchanged as prices are moving from 10 cents lower to 5 cents higher in the early minutes of trade. Traders remain stuck in the sideways market range and expected to hover in this level through the end of the week with very little fundamental or outside market factors expected to bring significant market shifts to the complex through the end of the week. Cash lean index for 9/13 is $149.46, up 0.42. Open interest Thursday added 303 position (52,199).

LEAN HOGS:

Opening call: Steady to 50 cents lower. Sluggish late week trade is pulling the lean hog futures market lower early Friday morning as traders have pushed front month October futures below $59 per cwt once again as initial trade has posted a 45 cent loss in front month spot contracts. The remainder of the nearby contracts remain sluggish contained within a narrow trading range of 10 to 20 cent losses. The continued pressure of cash markets and lack of certainty in pork values is limiting buyer interest Friday morning. Cash bids are 50 cents to $1.50 lower with bids scattered through the range. Open interest Thursday added 2,390 positions (253,984). Spot month October slipped 2,596 positions (66,139) and December added 3,091 positions (96,794). Cash lean index for 9/13 is $65.15, down 1.22. DTN projected slaughter for Friday is 445,000 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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