DTN Before The Bell-Livestock

GENERAL COMMENTS

Firm price support is seen in cattle futures early Tuesday morning as traders react to the moderate to sharp losses through the last week. The potential to spark wide ranging market support could help to instill market confidence over the coming days. Corn futures are higher in light trade. Stock market futures are higher. Dow Jones is 2 points higher while Nasdaq is up 26 points.

LIVE CATTLE:

Open: 50 to 90 cents higher. Short-covering activity is quickly developing across the live cattle futures with firm price support moving back into the complex. At this point, it continues to focus on the additional support across the market where increased commercial trade interest as the week continues to bring additional traders to the complex. The market appears to be oversold given the sharp losses over the last week, but traders remain uncertain as to the commitment level in the days and weeks ahead. Cash cattle activity remains quiet with very little direction developing across the complex. This may spark some increased market direction through the midweek, but bids and asking prices are likely to remain quiet over the next day or so. Active trade is likely to be seen late in the week. Open interest Monday fell 3,398 positions (366,138). Spot December lost 2,147 positions (19,058) and February contracts fell 1,372 positions (155,934). DTN projected slaughter for Tuesday is 118,000 head.

FEEDER CATTLE:

Open: 50 to 75 cents higher. Firm buying support is moving into the feeder cattle futures through the opening minutes of trade with gains seen from 50 to 70 cents per cwt in most contracts. This overall support in the complex continues to draw underlying support across the market. There may be some additional trade activity over the coming days, but the underlying tone of the market remains weak as traders look to establish a support level during the month of December. Cash lean index for 12/1 is listed at $156.69, down 0.51. Open interest Monday fell by 371 positions (56,968).

LEAN HOGS:

Open: Mixed. Light pressure is trickling into lean hog futures trade early Tuesday morning as traders try to counter the recent market support seen through the complex. The choppy price direction at the top end of the trading range seen over the last month is helping to focus traders on position taking opportunities through the day. This may bring additional market shifts through the rest of the week. Cash bids are steady. Open interest Monday added 1,069 positions (255,409). Spot month December slipped 1,995 positions (20,507) and February added 1,883 positions (101,746). Cash lean index for 12/01 is $63.92, up 0.66. DTN projected slaughter for Tuesday is 465,000 head. Saturday runs are pegged at 215,000 head.

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

(BAS)

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