DTN Before The Bell-Livestock

Narrow Cattle Price Shifts Develop Early Wednesday

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

Cattle futures have traded mixed in a narrow range during early trade Wednesday. This overall lack of follow-through support in the complex has led to markets very sluggish and buyers remaining on the sidelines as many traders focus on the development of cash markets through the rest of the week and outside market direction. Lean hog futures are under light to moderate pressure, pulling back from early week support. Corn markets are trading higher in light trade activity. The stock market is trading mixed in light early trade. Dow Jones is 2 points higher while Nasdaq is down 4 points.

LIVE CATTLE:

Opening call: Mixed. Light gains have slowly developed through nearby live cattle futures, although pressure in deferred contracts is quickly limiting the unified buyer support that some had hoped would step into the complex midweek. This may keep prices stuck in a narrow trading range over the near future with very sluggish trade expected through much of the morning. Cash cattle activity is slightly more active with initial bids starting to develop through the morning. Live bids are seen at $103 to $104 per cwt while dressed bids are developing at $165 through the morning. Asking prices remain at $108 to $109 live and $170 to $173 dressed. Open interest Tuesday gained 1,026 positions (326,939). Spot October lost 4,375 positions (72,864) and December contracts added 3,039 positions (127,580). DTN projected slaughter for Wednesday is 118,000 head.

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FEEDER CATTLE:

Opening call: Mixed. Light activity is seen in a narrow range through all feeder cattle futures with the focus on prices hovering between 10 cents lower and 10 cents higher. This could keep markets in a narrow but stable pattern through most of the midweek trading session. Cash lean index for 9/18 is $150.47, up 0.38. Open interest Friday gained 1,012 positions (54,180).

LEAN HOGS:

Opening call: Steady to 70 cents lower. Moderate pressure is developing early Wednesday morning with firm pressure seen in October futures as traders quickly back away from support seen in the early part of the week. At this point, volume is expected to remain extremely light, which may limit overall market direction and the ability to continue to push prices lower through the morning. Cash bids are 50 cents to $1.50 lower with bids scattered through the range. Open interest Tuesday added 1,101 positions (266,328). Spot month October slipped 3,748 positions (61,432) and December added 2,819 positions (107,273). Cash lean index for 9/18 is $61.88, down 0.94. DTN projected slaughter for Wednesday is 450,000 head. Saturday runs are expected to be seen at 228,000 head.

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

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Rick Kment