DTN Before The Bell-Livestock

GENERAL COMMENTS

Livestock markets are showing some market stability Friday morning. Trade volume is light in the early minutes with increased interest likely to develop, although there may not be additional direction developing through the day as very little additional market information is likely to develop over the next several hours. This could keep prices mixed through much 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 20 points higher while Nasdaq is up 12 points.

LIVE CATTLE:

Open: Mixed. Light activity is seen in live cattle futures with traders holding prices from 10 cents higher to 30 cents lower as trades are unable to find market direction Friday morning. Following the aggressive losses Thursday, very little incentive to bring additional pressure back to the market is allowing a sense of stability to move back into the complex at the end of the week. Cash cattle activity remains quiet early Friday morning following the light to moderate trade that developed across the complex where deals were seen generally $2 per cwt higher than last week in all areas. This continues to be the focus across the complex as packers are expected to be more active through the end of the week, although it is uncertain just how many more cattle will actually trade. Open interest Thursday added 1,135 positions (331,781). Spot October lost 1,681 positions (11,251) and December contracts slipped 1,080 positions (150,251). DTN projected slaughter for Friday is 117,000 head.

FEEDER CATTLE:

Open: Mixed. A combination of follow-through pressure and short covering is stepping into the complex early Friday morning as traders are slow to reenter the market. This is creating some sluggish market movement in the complex although the focus in the market is bringing very narrow price direction in all feeder cattle trade with most contracts hovering with narrow trading ranges. The overall movement through the complex could be limited through the end of the range as traders may focus on underlying activity in outside market shifts through the end of the week. Cash lean index for 10/11 is $155.14, down 0.08. Open interest Thursday added 666 positions (59,729).

LEAN HOGS:

Open: Mixed. Narrow support is moving into nearby lean hog futures as traders try to back away from the aggressive losses that swept through the complex Thursday afternoon. The uncertainty that now is seen in all livestock markets following the rally in grain markets is leaving some trades a little uneasy, but traders are now also looking toward the firmness still seen in cash hog prices. This is allowing slight 10 to 30 cent gains to develop in nearby gains. Cash bids are called steady to $1 per cwt higher with most bids expected to be 50 cents to $1 higher. Open interest Thursday added 2,064 positions (253,870). Spot month October slipped 987 positions (11,709) and December added 1,666 positions (119,135). Cash lean index for 10/11 is $59.12, up 0.80. DTN projected slaughter for Friday is 460,000 head, with Saturday runs expected at 207,000 head.

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

(SK)

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