DTN Before The Bell-Livestock

Sluggish Moves Limit Activity Early Tuesday Morning

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

Livestock futures are mixed to higher early Tuesday with traders carrying the lack of direction and enthusiasm from the Monday holiday session into the Tuesday trading day. The overall light volume is extremely evident and likely to continue through much of the morning which could allow prices to wander in a moderate range during most of the morning. Corn markets are trading higher in light trade activity. The stock market is trading higher in light early trade. Dow Jones is 55 points higher while Nasdaq is up 22 points.

LIVE CATTLE:

Open: Steady to 50 cents higher. Light activity is developing early Tuesday across live cattle futures with buyers slow to move into the complex following the holiday trade on Monday. The overall firmness seen in beef values is helping to bring about underlying market stability although commercial traders remain unwilling to become aggressive at this point. Trade volume is expected to remain extremely sluggish through most of the morning, which could allow for markets to wander in a narrow range through much of the session. Cash cattle activity remains at a standstill early Tuesday morning with bids and asking prices likely to remain undeveloped through most of the day. There could be a few token bids floated through the market through the end of the day, but it is unlikely that any attention would be given to these at this point at this time of the week with active trade expected to be pushed off until the end of the week. Feeders are looking for steady to higher money given the firmness of beef values and potential support in futures trade over the last week. Open interest Monday fell 2,763 positions (327,076). Spot October lost 2,750 positions (15,890) and December contracts fell 1,687 positions (150,202). DTN projected slaughter for Tuesday is 118,000 head.

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FEEDER CATTLE:

Open: Mixed. The lackluster moves seen Monday are carrying over into early Tuesday trade with traders looking for commercial support although the tone of the market may focus on potential support stepping into the complex through the first couple hours of trade. It is likely that traders will closely focus on the direction of live cattle futures as traders early Tuesday with very little movement in fundamentals early in the week to help to drive the market in either direction. Cash lean index for 10/6 is $155.35, down 0.22. Open interest Monday fell 484 position (59,486).

LEAN HOGS:

Open: Mixed. Light activity remains early Tuesday morning as traders continue to focus on the lack of direction seen in both outside markets as well as the sluggish market moves early in the week across both futures trade in lean hog futures Monday and moderate fundamental support. The expectation of firm cash buying activity early should help to spark some additional underlying commercial trade activity as additional volume moves into the market, but this activity is slow to develop Tuesday. Cash bids are called steady to $2 per cwt higher with most bids 50 cents to $1 higher. Open interest Monday liquidated 3,220 positions (253,798). Spot month October slipped 1,295 positions (14,828) and December fell 2,243 positions (117,753). Cash lean index for 10/6 is $56.42, up 0.85. DTN projected slaughter for Tuesday is 460,000 head, with Saturday runs expected at 204,000 head.

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

(SK)

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Rick Kment