DTN Before The Bell-Livestock

GENERAL COMMENTS

Narrow gains are trickling into the cattle complex early Friday morning following the ability to draw additional underlying support through the last week of September. Lean hog futures remain mixed in narrow range as traders are looking past the hogs and pigs report results and more focused on continued fundamental market shifts. Corn markets are trading higher in light trade activity. The stock market is trading mixed in light early trade. Dow Jones is 33 points lower while Nasdaq is up 9 points.

LIVE CATTLE:

Open: Steady to 50 cents higher. Light buyer support has redeveloped early Friday morning although gains have been limited by uncertainty as to just how much follow through support will be seen through the rest of the session. Traders are not only focusing on end-of-month positioning, but investment traders are also focusing on the end of quarter results. This could draw light buyer support back into the market through the entire session. Cash cattle remains quiet although light trade developed in the North at $172 on a dressed basis, the majority of trade will take place at some point during the day Friday. Bids are undeveloped at this point Friday morning, but packer interest is expected to steadily increase through the morning. Asking prices remain at $110 to $112 in the South and $172 to $174 in the North. Open interest Thursday added 194 positions (337,556). Spot October lost 1,860 positions (43,771) and December contracts added 1,312 positions (145,854). DTN projected slaughter for Friday is 117,000 head.

FEEDER CATTLE:

Open: Steady to 50 cents higher. Narrow gains have slowly trickled into the feeder cattle futures market early Friday morning with gains limited to 10 to 30 cents per cwt in most nearby contracts. This may continue to draw support into the market through the end of the week and stimulate additional buying activity during early October. Cash lean index for 9/26 is $152.43, up 0.11. Open interest Thursday gained 55 position (60,683).

LEAN HOGS:

Open: Mixed. Light activity in a narrow trading range is seen early Friday morning as traders are focusing more on fundamental market direction and the movement expected in cash and wholesale pork values through the session. Even though the hogs and pigs report was seen slightly bullish as overall hog numbers have were 2% lower than pre-report expectations, the market is unwilling to give much credit to the numbers as traders focus on still large hog numbers which may continue to heavily influence prices over the next several weeks. Cash bids are steady to $1 lower with most bids steady. Open interest Thursday fell 2,937 positions (258,315). Spot month October slipped 2,255 positions (35,580) and December fell 578 positions (117,753). Cash lean index for 9/26 is $56.25, down 0.73. DTN projected slaughter for Friday is 460,000 head. Procurement Saturday is expected at 242,000 head.

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

(SK)

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