DTN Before The Bell-Livestock

GENERAL COMMENTS

Narrow trading ranges are seen early Tuesday morning with initial activity remaining focused on the strong gains which developed early in the week. A combination of follow through buying and early session position squaring is keeping prices mixed across the livestock complex. Corn futures are lower in light trade. Stock market futures are higher. Dow Jones is 66 points higher while Nasdaq is up 6 points.

LIVE CATTLE:

Open: Steady to 30 cents lower. Traders are busy squaring positions following the triple digit gains which quickly developed Monday. The overall lack of support in the complex continues to drive additional buyer interest back into the market with traders focusing on increased buyer activity. This may spark some additional longer term activity over the near future although with prices in December contracts hovering near $120 per cwt, the focus remains firmly on cash activity and beef values. Cash cattle activity remains at a standstill with bids unavailable at this point and may remain that way over the next couple of days. It is expected that overall active trade volume may be delayed until Thursday or Friday even though packers are expected to have gone into the week short bought. Open interest Monday gained 2,701 positions (381,469). Spot December lost 2,472 positions (39,409) and February contracts gained 3,202 positions (154,260). DTN projected slaughter for Tuesday is 117,000 head.

FEEDER CATTLE:

Open: 20 to 40 cents higher. Narrow gains have developed with the overall tone of the market remains firm through the week, although the volatility over the last month has created some longer term uncertainty through the complex. Narrow gains have been seen through the complex as the narrow losses in live cattle futures seem to be hinting at moderate trader apathy through the session. Very sluggish market direction is now seen in the market, which could limit a long term market shift over the next couple of days. Cash lean index for 11/24 is listed at $155.26, down 0.32. Open interest Monday lost 316 positions (55,794).

LEAN HOGS:

Open: Steady to 10 cents higher. Light buyer support is trickling into the complex early Tuesday morning with single digit gains holding in nearby contract months. The overall lack of follow through buying activity after the aggressive gains seen Monday is not a surprise, although market watchers are focused on the ability to sustain these recent gains as more volume is likely to step back into the market over the next couple of days. Cash bids are called steady to 50 cents lower with most bids steady. Open interest Monday lost 130 positions (247,085). Spot month December slipped 2,082 positions (31,827) and February added 628 positions (93,441). Cash lean index for 11/24 is $63.08, down 0.58. DTN projected slaughter for Tuesday is 462,000 head. Saturday runs are expected to run near 245,000 head.

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

(BAS)

Copyright 2017 DTN/The Progressive Farmer. All rights reserved.