DTN Before The Bell-Livestock

GENERAL COMMENTS

Mixed price levels within a narrow trading range is the focus across the entire livestock market early Thursday morning. This could help to stimulate additional market support across the complex with increased buyer activity through the complex. Corn futures are higher in light trade. Stock market futures are higher. Dow Jones is 126 points higher while Nasdaq is up 25 points.

LIVE CATTLE:

Open: Steady to 30 cents lower. Light pressure is trickling into the live cattle complex early Thursday morning. The volatility during the Wednesday session and ability for buyers to quickly step back into the market through the end of the session is creating some position taking. This focus on market adjustments may be the main order of business due to traders closing the books on November at the end of the session. There is expectations that increased market shifts will develop in December based on expected strong demand through the end of the year. This could help to bring additional market activity to the entire complex. Cash cattle trade remains undeveloped early Thursday morning but interest is expected to increase through the day. Bids are redeveloping steady to firm from midweek levels with live bids seen at $117 while dressed bids have moved to $190 per cwt. This is still below asking prices of $121 and higher live and $192 to $195 dressed, but trade may not develop until late in the week. Open interest Wednesday gained 1,551 positions (380,506). Spot December lost 3,512 positions (33,064) and February contracts gained 772 positions (156,225). DTN projected slaughter for Thursday is 118,000 head.

FEEDER CATTLE:

Open: Steady to 20 cents higher. Light gains have slowly developed through feeder cattle futures even though live cattle markets have shown narrow price pressure Thursday morning. The follow through support following gains Wednesday is helping to set the tone for a potentially stable and lightly traded market during the last trading session of November. A combination of end of the month positioning is likely to be seen through the complex. This may spark additional movement in both directions at different parts of the day. Cash lean index for 11/28 is listed at $156.81, up 0.06. Open interest Wednesday added 647 positions (57,008).

LEAN HOGS:

Open: Steady to 40 cents higher. Frim gains have quickly moved into the lean hog futures complex early Thursday morning after the inability to sustain the previous market support was seen midweek. There continues to be some concern that buyer support may not be extremely deep, which may limit support through the complex. This would first be evidenced by mixed trade developing through the morning. There is also expected to be many traders focusing on squaring positions at the end of the month, adding additional volatility to the market. Cash bids are called steady to $1 higher with bids scattered evenly through the range. Open interest Wednesday added 2,379 positions (252,927). Spot month December slipped 2,689 positions (26,038) and February added 1,982 positions (98,442). Cash lean index for 11/28 is $62.96, up 0.07. DTN projected slaughter for Thursday is 465,000 head. Saturday runs are expected to run near 241,000 head.

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

(BAS)

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