DTN Before The Bell-Livestock

GENERAL COMMENTS

Cattle futures are turning lower early Thursday with October and December trade holding the most aggressive losses. This has broken away from triple-digit gains seen early in the week. Lean hog markets continue to advance higher, based on strong fundamental support. Corn markets are trading lower in light trade activity. The stock market is trading lower in light early trade. Dow Jones is 33 points lower while Nasdaq is down 12 points.

LIVE CATTLE:

Open: 50 to 80 cents lower. Strong pressure has quickly developed in live cattle futures trade Thursday morning following the mixed market moves midweek. Concerns that additional strong liquidation and pressure in beef values may bring additional pressure to the complex is adding weakness to traders stepping into October futures. Cash market interest is still sluggish early Thursday morning with no bids developing at this point. Asking prices remain at $113 and higher on a live basis and $175 and higher dressed. It is expected that trade may be delayed until Friday, but packer interest should be more evident as the day continues. Open interest Wednesday added 752 positions (330,663). Spot October lost 1,371 positions (12,976) and December contracts slipped 428 positions (151,341). DTN projected slaughter for Thursday is 118,000 head.

FEEDER CATTLE:

Open: Steady to 30 cents lower. Sluggish movement is seen through the feeder cattle complex Thursday morning with traders focusing on the overall lack of direction over the last couple of weeks. There continues to be some underlying softness in the market as commercial traders remain concerned about prices holding at the top end of the price range with live cattle futures unable to show strong support at the end of the week. This could limit additional support through the rest of the week, which could bring about further liquidation through the entire complex. Cash lean index for 10/10 is $155.22, down 0.05. Open interest Wednesday fell 256 position (59,076).

LEAN HOGS:

Open: 30 to 80 cents higher. Firm follow-through buyer support is slowly developing through the lean hog complex following the strong support seen over the last couple of trading sessions. Active support in cash markets has helped to draw traders back into the complex which is sparking additional longer term support through both nearby and deferred futures in the first few minutes of trade Thursday. Trade volume remains light. But the commercial interest seen in the market, could help to spark additional longer term activity through the rest of the session. Cash bids are called steady to $1 per cwt higher with bids scattered through the range. Open interest Wednesday added 341 positions (251,863). Spot month October slipped 1,127 positions (12,701) and December added 1,110 positions (117,488). Cash lean index for 10/10 is $58.32, up 1.21. DTN projected slaughter for Thursday 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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