DTN Before The Bell-Livestock

GENERAL COMMENTS

Livestock futures have opened mixed in light trade with firm buyer support seen through the live cattle and feeder cattle markets. This has been offset by an early pullback in lean hog futures which are covering gains seen late last week. Corn markets are trading lower in light trade activity. The stock market is trading higher in light early trade. Dow Jones is 65 points higher while Nasdaq is up 27 points.

LIVE CATTLE:

Opening call: Steady to 50 cents higher. Light to moderate buyer support is moving into nearby contracts with traders focusing on front month October futures with prices moving to $108 per cwt. There is expected to be follow through support in all nearby and deferred futures contracts during the first hour of trade, although most of the support is expected to be focused on October and December contracts. Cash cattle activity is expected to remain quiet once again Monday as packers enter the market short bought once again given the lack of moderate to active trade last week. The trade that developed through late day Friday helped to meet immediate needs, but feeders are expected to become more aggressive through the end of the month. This could help to increase asking prices through the week. Show lists are expected to be larger but at this point bids and asking prices are both undeveloped. Open interest Friday lost 1,159 positions (324,977). Spot October lost 5,215 positions (82,981) and December contracts added 1,751 positions (121,262). DTN projected slaughter for Monday is 118,000 head.

FEEDER CATTLE:

Opening call: Steady to 50 cents higher. Firm follow through support has stepped back into the complex through early trade in feeder cattle markets. Even though little has changed in market fundamentals over the last week, the firm support in futures trade last week has helped to spark technical support and renewed commercial buyer interest back into the complex Monday morning. Cash lean index for 9/14 is $149.73, up 0.27. Open interest Friday lost 38 position (52,117).

LEAN HOGS:

Opening call: 50 cents to $1 lower. Early pressure is quickly sweeping through the lean hog futures complex. Front month October contracts posted a 90 cent loss during the initial minutes of trade with prices moving back to $60 per cwt as traders quickly back away from the triple digit rally seen late last week. The uncertainty in the complex could leave markets unsettled through the rest of the morning. Cash bids are 50 cents to $1.50 lower with bids scattered through the range. Open interest Friday added 5,256 positions (259,071). Spot month October slipped 35 positions (66,201) and December added 3,656 positions (100,307). Cash lean index for 9/14 is $64.07, down 1.08. DTN projected slaughter for Monday is 450,000 head.

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

(SK)

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