DTN Before The Bell-Livestock

GENERAL COMMENTS

Strong gains have moved into cattle trade with nearby live cattle and feeder cattle futures holding gains of $1 to $2 per cwt in several contract months. The pullback early in the week is the main focus of the renewed interest as traders are looking for additional commercial buyer interest to step back into the complex. Lean hog futures remain mixed in light trade. Corn markets are trading mixed in light trade activity. The stock market is trading higher in light early trade. Dow Jones is 63 points higher while Nasdaq is up 29 points.

LIVE CATTLE:

Opening call: Steady to $1 higher. Firm support continues to quickly flood into live cattle markets early Wednesday morning, although traders are focusing on the pullback in prices early in the week as they try to establish some renewed stability in the complex. Cash cattle activity remains sluggish with bids redeveloping in the South at $104 per cwt. This is creating some uncertainty in the market as asking prices remain at $110 to $111 in the South. Activity in the North remains quiet. The Fed Cattle Exchange Auction will trade through the morning which may bring some additional clarity to cash market moves. Open interest Tuesday gained 1,098 positions (338,086). Spot October lost 3,846 positions (49,637) and December contracts added 423 positions (142,314). DTN projected slaughter for Wednesday is 118,000 head.

FEEDER CATTLE:

Opening call: $1 to $2 higher. Strong support has moved into feeder cattle markets early Wednesday morning with the focus on increased buyer interest following the turn lower early in the week. The expectation of live cattle moving higher is helping to draw active volume into most feeder cattle markets. Cash lean index for 9/25 is $152.32, down 0.28. Open interest Tuesday gained 1,716 position (59,797).

LEAN HOGS:

Opening call: Mixed. Sluggish activity is seen in lean hog trade with traders focusing on spillover buying stepping into the market. Volume remains light, but traders are looking for additional direction from both cash and pork values through the day. Cash bids are steady to $1 lower with most bids expected 50 cents $1 lower. Open interest Tuesday fell 1,197 positions (262,814). Spot month October slipped 2,973 positions (41,281) and December added 841 positions (116,724). Cash lean index for 9/25 is $56.98, up 0.32. DTN projected slaughter for Wednesday is 460,000 head. Procurement Saturday is expected at 240,000 head.

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

(SK)

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