DTN Before The Bell-Livestock

Cattle Futures Continue Lower on Larger October Placements

Rick Kment
By  Rick Kment , DTN Analyst
(DTN photo by Nick Scalise)
GENERAL COMMENTS

Light pressure in cattle futures as traders focus on expected weakness following higher-than-expected placement levels and increased cattle on feed numbers in the most recent Cattle on Feed report. This could limit buying in most markets early in the week. Hog futures remain mixed with nearby gains offsetting the pressure redeveloping across deferred contracts. Corn futures are lower in light trade. Stock market futures are higher. Dow Jones is 34 points higher while Nasdaq is up 10 points.

LIVE CATTLE:

Open: 20 to 60 cents lower. Light pressure early Monday morning in live cattle futures following the trend of the last couple of weeks. Sluggish market activity is expected through the morning and during the entire week as traders focus on potential beef demand through the end of the month as well as increased placement levels in the month of October. Sluggish trade volume is likely to keep prices within a narrow range early Monday. Traders look for very little activity to develop during the entire week. Cash cattle markets remain undeveloped -and likely will remain that way until near midweek. The holiday-shortened week will likely draw cash cattle trade sooner, although little interest is expected to be seen Monday. Open interest Friday added 43 positions (385,426). Spot December lost 2,196 positions (56,262) and February contracts added 473 positions (156,147). DTN projected slaughter for Monday is 118,000 head.

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FEEDER CATTLE:

Open: Steady to 15 cents lower. Despite the bearish Cattle on Feed report Friday, which posted total cattle placement levels at 110%, which is nearly 4% higher than pre-report estimates, traders are focusing on follow-through selling. But the fact that prices have remained in a narrow range following the triple-digit tumble Friday is bringing some needed stability through the complex. Cash lean index for 11/15 is listed at $158.44, down 0.86. Open interest Friday lost 289 position (60,526).

LEAN HOGS:

Open: Mixed. Early support is slowly trickling into nearby lean hog futures Monday morning as traders prepare for the short holiday week. With markets closed Thursday for the Thanksgiving break and an early close on Friday, it is expected traders will see very little activity through the entire week. This light volume may add volatility to the complex. December through April contracts are holding narrow to moderate gains with light pressure seen through the deferred contracts. Cash bids are called steady to $1 lower most bids are expected to be 50 cents lower. Open interest Friday lost 2,661 positions (256,573). Spot month December slipped 1,995 positions (43,725) and February lost 456 positions (92,990). Cash lean index for 11/16 is $65.42, down 0.55. DTN projected slaughter for Monday is 465,000 head. Saturday runs are expected to be near 340,000 head.

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

(BAS)

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Rick Kment