DTN Before The Bell-Livestock

GENERAL COMMENTS

Cattle markets are holding sharp losses with aggressive pressure seen through the complex. This may add to follow-through weakness in all livestock markets. There may be some support in lean hog trade through the last half of the day Monday, but this may not help to bring buyers back to the cattle complex. Corn markets are trading steady in light trade activity. The stock market is trading lower in light early trade. Dow Jones is 20 points lower while Nasdaq is down 4 points.

LIVE CATTLE:

Opening call: $1 to $2 lower. Sharp losses have quickly stepped into the live cattle futures complex with traders focusing on the overall lack of support through the market. There is uncertainty in the ability to draw buyer interest back into the market through the day with widespread liquidation seen across the complex. December futures are holding the most aggressive pressure early Monday morning with traders focusing on the potential to hit limit losses before the end of the session. Cash cattle activity remains sluggish with show list distribution and inventory taking being the major focus through the day. This will continue to drive additional buyer support back into the market. Open interest Friday gained 3,684 positions (337,001). Spot October lost 4,375 positions (72,864) and December contracts added 3,039 positions (127,580). DTN projected slaughter for Monday is 118,000 head.

FEEDER CATTLE:

Opening call: $1 to $3 lower. Sharp losses have quickly been developing across the feeder cattle markets as traders are focusing on the lack of follow through buyer support in the market. There is additional concerns that follow through increases will move through the market as traders will move into the complex. Cash lean index for 9/18 is $150.47, up 0.38. Open interest Friday gained 1,012 position (54,180).

LEAN HOGS:

Opening call: Steady to 70 cents lower. Firm pressure has developed thorugh the overall lean hog market complex as triple-digit losses in cattle markets seen early Monday is helping to limit additional buyer support through the complex. There is additional softness expected to be seen from outside markets as well as cash market activity. Cash bids are steady $1.50 lower with most bids steady to 50 cents lower. Open interest Friday added 872 positions (266,328). Spot month October slipped 3,748 positions (61,432) and December added 2,819 positions (107,273). Cash lean index for 9/22 is $61.88, down 0.12. DTN projected slaughter for Monday is 453,000 head.

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

(SK)

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