DTN Before The Bell-Livestock

GENERAL COMMENTS

Firm buyer support is moving into the cattle market early Thursday. This is not surprising as traders are trying to cover positions following previous losses. But any sense of follow-through buying interest developing could bring increased support to the market over the next several days. Corn futures are higher in light trade. Stock market futures are higher. Dow Jones is 54 points higher while Nasdaq is up 27 points.

LIVE CATTLE:

Open: Steady to 60 cents higher.

Firm gains are redeveloping Thursday, but overall support in the market remains uncertain given the inability to hold prices higher earlier in the week. This may bring about increased volatility as volume increases through the day. With very little fundamental direction, traders will be more focused on outside market shifts during the end of the week. Cash cattle markets remain at a standstill following the sluggish development of bids seen over the last couple of days. There still remains a wide gap between asking prices and bids and this should start to narrow through the day. But it may not spark active trade until sometime Friday. Open interest Wednesday added 1,400 positions (339,730). Spot December lost 1,000 positions (9,053) and February contracts fell 423 positions (133,884). DTN projected slaughter for Thursday is 118,000 head.

FEEDER CATTLE:

Open: Steady to 50 cents higher.

Light support is moving into the market early in the session with traders more focused on short-covering potential following the triple-digit losses seen at midweek. It is uncertain at this point just how much additional buyer support will move to the market and if this will continue to draw buyer activity into the complex. Cash lean index for 12/12 is listed at $153.64, down 0.35. Open interest Wednesday added 108 positions (53,930).

LEAN HOGS:

Open: Mixed.

Narrow trading ranges have developed early Thursday morning with the pressure in cash and pork values limiting any consistent buyer support. This may bring additional trade activity to the complex, although there may be some additional support developing at the end of the week. Market stability seems to be the focus in most contracts through the end of the week. Cash bids are steady to $2 per cwt lower. Most bids are $1 lower. Open interest Wednesday added 1,718 positions (243,766). Spot month December slipped 614 positions (11,112) and February gained 652 positions (94,622). Cash lean index for 12/11 is $64.97, down 0.20. DTN projected slaughter for Thursday is 465,000 head. Saturday runs are expected to hit 247,000 head.

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

(BAS)

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