DTN Before The Bell-Livestock

GENERAL COMMENTS

Livestock futures are trading mixed to mostly higher as lean hog futures are leading the buyer support in the first few minutes of trade. It is uncertain just how deep this renewed buyer support will be following the strong moves seen Monday, but the market is expected to remain generally sluggish through most of the morning as traders focus on very little widespread market direction. Corn futures are lower in light trade. Stock market futures remain mixed. Dow Jones is 6 points higher while Nasdaq is down 5 points.

LIVE CATTLE:

Open: Mixed. Light volume has developed across the live cattle complex with traders focusing on the pullback in feeder cattle futures and choppy outside market direction early in the week. Firm gains have redeveloped in nearby live cattle trade, although the pressure in deferred contracts has helped to apply the brakes on any upward momentum through the morning. Open interest Monday fell 664 positions (330,655). Spot October lost 1,449 positions (8,453) and December contracts slipped 1,381 positions (148,679). DTN projected slaughter for Tuesday is 118,000 head.

FEEDER CATTLE:

Open: Steady to 25 cents lower. Follow-through pressure is slowly developing through the feeder cattle futures trade as traders try to adjust to the pullback in the complex early in the week. This is leaving the market with very little sense of direction through the first few minutes of trade. Additional market movements are likely to develop through the next couple hours in both nearby and deferred futures. Cash lean index for 10/13 is $155.66, up 0.43. Open interest Monday fell 24 position (60,390).

LEAN HOGS:

Open: 10 to 40 cents higher. Firm support has slowly trickled into the lean hog futures complex with traders focusing on follow through moves as nearby contracts break through resistance levels once again. December contracts have moved above $64 per cwt with traders focusing on the ability to spark additional technical and fundamental support through the last couple weeks of October, while follow through buying is starting to trickle into the rest of the complex despite the light volume Tuesday morning. Cash bids are called steady to $1 per cwt higher with most bids expected to be 50 cents to $1 higher. Open interest Monday added 270 positions (255,416). Spot month December slipped 330 positions (118,750) and February added 259 positions (46,350). Cash lean index for 10/13 is $60.24, up 0.73. DTN projected slaughter for Tuesday is 465,000 head. Saturday runs are expected to hit 195,000 head.

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

(SK)

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