It's a typically slow Monday morning in cattle country with packers setting out to collect new showlists and little more. Our guess is that the offering for the first full week of November will be steady to somewhat larger. Given the amazing pace of the cash rally over the last fortnight, it's a no-brainer to predict sharply higher asking prices. That said, we don't expect feedlot managers to put their foot on base until midweek or later. Hog buyers at back at work this morning with bids ranging from steady to $1 lower. Yet most of the early effort appears to be fully a buck back. The corn trade is a penny plus higher in the early rounds, modestly supported by an initial report of export sales to unknown destination. The stock market has opened on a mixed basis with the Dow off 6 points and the Nasdaq positive by 11.
After last week's bullish explosion in the cattle complex, it's hardly surprising to see some profit-taking interest surface here in the early rounds. Live prices are moderately lower as specs and commercials consider if the cash market can possibly maintain the breakneck pace seen over the last two week. Frankly, live futures could falter a good deal early this week without significantly damaging the sharp uptrend. Open interest on Friday increased by 6,742 (376,194). Spot December liquidated by 3,832 (124,176) and February surged by 6,084 (107,828). DTN projected slaughter for today is 117,000 head.
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Feeder futures have also opened moderately lower, though the negative tone thus far seems no more severe than profit-taking and position-evening. Needless to say, the bullish bias here continued to be joined at the hip with the premium status of deferred live contracts. Open interest on Friday increased by 687 (64,811). CME cash feeder index for 11/02: $159.23, up $0.52.
Lean issues are modestly lower so far this morning with traders cautious about the seasonal threats of large production through the balance of the fourth quarter and inadequate demand. Yet the premium status of the cash index may keep aggressive selling interest at bay, at least temporarily. Open interest on Friday increased by 1,127 (247,664). Spot December liquidated by 3,212 (756) and February increased by 2,599 (68,825). Cash lean index 11/02: $69.28, off $0.14. DTN projected slaughter for today is 465,000 head.
John A. Harrington can be reached at email@example.com
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