DTN Before The Bell-Livestock

GENERAL COMMENTS

Livestock futures have opened mixed to mostly lower early Tuesday morning as the overall lack of direction and market incentives seen through the early part of the week has limited overall buyer support through the complex. This may spark additional pressure through the morning, although the focus on narrow trade ranges could keep prices range bound over the near future. Corn futures are lower in light trade. Stock market futures are lower. Dow Jones is 60 points lower while Nasdaq is down 23 points.

LIVE CATTLE:

Open: Mixed. Initial trade Tuesday is focusing on light but very evident short covering in nearby contracts with trade 10 to 30 cents higher in the opening minutes of trade Tuesday. This is being offset by additional pressure in deferred contracts with the focus on additional market shifts through the complex as traders remain concerned about the follow through support by both commercial and investment traders during the end of the year. This could leave prices mixed in a narrow trading range through much of the session as traders seem to be focused on a combination of technical and fundamental factors. Cash cattle markets remain undeveloped early Tuesday morning with bids and asking prices still undeveloped. It is likely that asking prices may be more evident through the day Tuesday, although active trade is not expected until the second half of the week. Packers may not show much interest through the day Tuesday, although it is likely that additional support may be develop midweek. Open interest Monday added 5,412 positions (388,008). Spot December lost 5,051 positions (76,158) and February contracts added 7,978 positions (147,379). DTN projected slaughter for Tuesday is 118,000 head.

FEEDER CATTLE:

Open: 30 to 60 cents lower. Follow through pressure has continued to develop Tuesday morning following the narrow losses in most contract months which developed Monday. Traders continue to focus on the direction in live cattle trade as well as outside market moves, which may spark some renewed support through the rest of cattle market. Following the strong pressure at the first of the month, the focus on building market stability is the focus of many traders as they also try to assess fundamental market direction and the moves later in the week in cash cattle trade. Cash lean index for 11/10 is $160.05, up 0.72. Open interest Monday fell 612 position (63,096).

LEAN HOGS:

Open: Steady to 40 cents lower. The inability to bring active buyer support back into the complex Monday has caused traders to slowly back away from previous price levels early Tuesday. This has pushed nearby contracts 30 to 40 cents per cwt lower in the opening minutes of trade, while deferred futures are hovering from 2 to 25 cents per cwt lower in lackluster activity. The overall lack of direction in the complex over the last couple of sessions is focusing on the strong makret pressure seen last week. With front month futures falling over $6 since the first of the month, additional bearish tones are seen across the complex. Cash bids are called steady to $1 lower with most bids 50 cents to $1 lower. Open interest Monday added 1,425 positions (267,839). Spot month December slipped 6,291 positions (57,954) and February added 4,706 positions (91,062). Cash lean index for 11/10 is $67.00, down 0.47. DTN projected slaughter for Tuesday is 465,000 head. Saturday runs are expected to be near 152,000 head.

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

(BAS)

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