DTN Before The Bell-Livestock

GENERAL COMMENTS

Light buyer support is attempting to step back into the cattle complex with traders focusing on increased market direction following the choppy but light trade activity seen midweek. Mixed trade is also seen in lean hog futures while additional buyer support moving into nearby contracts. Corn markets are trading lower in light trade activity. The stock market is trading higher in light early trade. Dow Jones is 23 points higher while Nasdaq is up 21 points.

LIVE CATTLE:

Open: Steady to 30 cents higher. Early trade in live cattle futures has held narrow gains in most nearby and deferred contract months Thursday morning. This ability to bring traders slowly back into the market continues to draw market interest, although prices continue to be stuck in a moderate to wide price gapping $7 per cwt over the last month. Cash cattle markets remain quiet early Thursday morning following generally quiet day of trade Wednesday. A few trades were reported in the North Wednesday with prices listed from $107 to $108.50 with the high end of the range dedicated to regional buyers. There continues to be some uncertainty as to just how long feeders will hold out at this point. Open interest Wednesday added 339 positions (334,090). Spot October lost 3,597 positions (28,861) and December contracts added 1,323 positions (149,981). DTN projected slaughter for Thursday is 118,000 head.

FEEDER CATTLE:

Open: 30 to 60 cents higher. Feeder cattle futures have chopped around in a narrow to moderate trading range with the overall lack of direction early Thursday focusing on position squaring activities after the overall lack of support seen Wednesday. There continues to be some additional buyer support slowly moving into the market during the first few minutes of trade, although the overall strength of the market is uncertain given the lack of direction also seen in live cattle trade. There is increased outside market movements that will likely contribute to late day commercial activity moving into the feeder cattle complex. Cash lean index for 10/3 is $155.65, down 0.11. Open interest Wednesday gained 60 position (59,617).

LEAN HOGS:

Open: Mixed. Early trade remains extremely sluggish with prices opening 20 cents lower to 37 cents per cwt higher in light trade. The overall lack of direction early Thursday morning follows the trend of inactivity through the complex as traders continue to focus on increased market support in fundamental markets. October and December contracts continue to hold light gains as increased contract rolling is being done late in the week. This could keep markets hovering in a narrow range over the next couple of days. Cash bids are called steady to $2 per cwt higher with most bids 50 cents to $1 higher. Open interest Wednesday added 634 positions (258,111). Spot month October slipped 2,071 positions (19,505) and December gained 19 positions (120,401). Cash lean index for 10/3 is $54.97, up 0.58. DTN projected slaughter for Thursday is 460,000 head. Saturday runs are expected at 240,000 head.

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

(SK)

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