DTN Before The Bell-Livestock

GENERAL COMMENTS

Livestock futures have posted a moderate pullback early Friday morning. The pressure which developed late Thursday was carried over to morning losses. This carries the weaker market tone into the month of December as traders still remain uncertain about being able to actively move the growing supplies through the end of the year. Corn futures are higher in light trade. Stock market futures are lower. Dow Jones is 33 points lower while Nasdaq is down 32 points.

LIVE CATTLE:

Open: 60 to 80 cents lower. Light to moderate losses have been seen early Friday morning as traders continued the pressure which developed at the end of November. Even with firming cash values, the overall lack of interest in bringing additional buyers to the market is limiting overall support through the complex. Cash cattle activity is starting to pick up with a few bids redeveloping at $121 in the South. This follows light to moderate trade that developed through mid to late afternoon Thursday. Live bids were seen from $120 to $121 in both the North and South, while dressed trade remained sluggish, but posted prices of $190 per cwt. This is generally $1 to $3 per cwt higher than last week's values, and could spark some additional trade through the day. Open interest Thursday fell 879 positions (378,830). Spot December lost 4,017 positions (28,991) and February contracts gained 447 positions (155,934). DTN projected slaughter for Friday is 116,000 head.

FEEDER CATTLE:

Open: $1 to $1.50 lower. Strong pressure is quickly moving into cattle trade with triple-digit losses seen in most feeder cattle markets at opening bell. This follow through pressure which developed after the strong market support earlier in the week seems to be refocusing trader's interest as they now look to the month of December and potential news of beef demand. There is likely to be some commercial support still attempting to step into the market at the end of the week, which may erode initial losses by the end of the session. But the tone of the market remains weak. Cash lean index for 11/29 is listed at $156.92, up 0.09. Open interest Thursday added 1,048 positions (58,050).

LEAN HOGS:

Open: Mixed. Initial trade Friday morning is mixed in a moderate trading range as traders are taking advantage of a new month on the books. With the first of December now hear, there is more focus on end of the year supply and demand issues as the holiday season through the last couple weeks of December will limit overall production levels, while holiday demand and export movement is likely to continue to remain strong. This could help to spark some additional longer-term market support through the entire complex, although all but front-month contracts are under pressure in the opening minutes of trade. Cash bids are called steady to 50 cents higher with bids scattered evenly through the range. Open interest Thursday added 1,666 positions (254,564). Spot month December slipped 1,837 positions (24,200) and February added 1,058 positions (99,488). Cash lean index for 11/29 is $62.99, up 0.03. DTN projected slaughter for Friday is 460,000 head. Saturday runs are expected to run near 245,000 head.

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

(BAS)

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