DTN Before The Bell-Livestock

GENERAL COMMENTS

Strong follow-through buyer support is seen across cattle futures, even though trade volume remains extremely light across the complex. There remains very light trade activity through the rest of the complex. Pressure is starting to develop in lean hog futures trade with December futures leading the market lower. Corn futures are higher in light trade. Stock market futures are mixed. Dow Jones is 2 points higher while Nasdaq is down 3 points.

LIVE CATTLE:

Open: Steady to $1 higher. Strong gains have quickly developed in the opening minutes of trade Thursday morning as traders try to adjust to the higher additional market support seen in the complex. There continues to be additional underlying support across the market although the lack of volume in deferred futures will put most of the emphasis on nearby contracts through the morning. This overall lack of support across the complex could lead to mixed price moves later in the session. Cash cattle activity is starting to slowly improve early Thursday morning with a few bids starting to be seen in the South at $116 per cwt live basis. Asking prices are currently at $126 through the South. It is expected that the tone of the market will improve through the day, although trade may not be active until either late Thursday or sometime Friday. Open interest Wednesday gained 8,837 positions (363,308). Spot December lost 704 positions (130,097) and February contracts added 5,274 positions (97,240). DTN projected slaughter for Tuesday is 117,000 head.

FEEDER CATTLE:

Open: 50 cents to $1 higher. Additional price support is expected to develop across the feeder cattle futures complex with traders focusing on firm support in both live cattle and feeder cattle markets through early November. The focus on support in cash cattle trade that is likely to develop through the end of the week is helping to draw additional commercial support back into the complex. Cash lean index for 10/31 is $157.34, up 0.42. Open interest Wednesday added 517 position (64,006).

LEAN HOGS:

Open: 40 to 80 cents lower. Light to moderate pressure has developed across the lean hog futures complex with traders focusing on additional market weakness potentially developing in front month futures. The strong pullback in December contracts midweek has caused follow through pressure to develop across the overall hog market as traders look for additional fundamental pressure to be seen through the end of the week. Cash bids are called steady to $1 lower with most bids 50 cents to $1 lower. Open interest Wednesday added 5,515 positions (269,243). Spot month December slipped 581 positions (105,373) and February added 3,233 positions (63,452). Cash lean index for 10/31 is $69.30, up 0.23. DTN projected slaughter for Thursday is 465,000 head. Saturday runs are expected at 166,000 head.

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

(SK)

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