DTN Before The Bell-Livestock

GENERAL COMMENTS

Moderate pressure is seen through the live cattle futures complex with traders focusing on additional market pressure. There may be some additional weakness developing in the complex later in the session, although the overall tone of the market remains sluggish. Mixed trade is seen in lean hog futures as buyers are starting to step back into front-month December futures. Corn futures are higher in light trade. Stock market futures are lower. Dow Jones is 66 points lower while Nasdaq is down 2 points.

LIVE CATTLE:

Open: 10 to 40 cents lower. Narrow selling activity is seen once again through the complex with prices hovering between 15 and 40 cents per cwt in most contracts during initial trade. With additional pressure seen in the feeder cattle market as well as concerns that further fundamental pressure will be seen next week due to the lightly traded holiday week, future traders remain unwilling to aggressively step in and buy. Cash cattle activity remains at a standstill. Although there could be some follow-up cleanup trade developing before the end of the week, it is expected that most of the trade is already done, which is likely to leave markets within the same range as previous trade if any deals are done through the end of the day. Open interest Thursday added 18 positions (386,007). Spot December lost 4,259 positions (58,515) and February contracts added 776 positions (156,128). DTN projected slaughter for Friday is 118,000 head.

FEEDER CATTLE:

Open: 50 to 80 cents lower. Firm pressure has quickly redeveloped through feeder cattle futures, which is focusing on the follow-through pressure seen earlier in the week. The overall lack of positive direction in the complex continues to be a challenge to bring buyers back into the market at the end of the week. Even with the aggressive losses seen over the last two weeks, prices remain stuck within the wide trading range and are still significantly above support levels. This may continue to allow sellers to wander into the complex. Cash lean index for 11/15 is listed at $158.44, down 0.86. Open interest Thursday lost 460 position (60,818).

LEAN HOGS:

Open: Mixed. Light trade is seen in lean hog futures with traders quickly backing away from earlier week pressure. Initial trade is seen within a narrow range from 20 cents lower in deferred contracts to 30 cents per cwt higher in front month December futures. This overall lack of consistency in the market may leave many traders waiting on the sidelines until next week and more uniform market direction. Cash bids are called 50 cents to $1 lower bids scattered through the range. Open interest Thursday lost 1,713 positions (259,403). Spot month December slipped 2,915 positions (45,730) and February gained 1,590 positions (93,449). Cash lean index for 11/15 is $65.97, down 0.40. DTN projected slaughter for Friday is 465,000 head. Saturday runs are expected to be near 155,000 head.

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

(BAS)

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