DTN Before The Bell-Livestock

GENERAL COMMENTS

Moderate to strong support is quickly moving back to the market with traders looking for increased buyer support through midweek. Gains in cattle trade are nearing $1 per cwt gains and quickly bouncing off of lows set last week. This support could quickly help to draw additional interest back into the market through the month of January. Corn futures are higher in light trade. Stock market futures are mixed, Dow Jones is 5 points lower while Nasdaq is up 7 points.

LIVE CATTLE:

Open: 50 cents to $1 higher.

Moderate to strong support is quickly redeveloping in nearby contracts. This is helping to not only put the emphasis on trade activity but is likely to draw additional support through the complex. Most nearby contracts are hovering between 70 cent and 80 cent gains in the opening minutes of trade, but this could quickly draw additional commercial trade back to the complex, which has liquidated positions over the last two weeks. Cash cattle activity remains light and generally undeveloped with bids unlikely through most of the day. Even though the Fed Cattle Exchange is scheduled to trade, the impact should not be significant given the holiday week and recent light trade. A few asking prices in the South have been heard at $122 to $125, although nothing has developed in the North at this point. Open interest Tuesday added 1,335 positions (332,083). Spot December lost 615 positions (1,401) and February contracts fell 103 positions (120,335). DTN projected slaughter for Wednesday is 118,000 head.

FEEDER CATTLE:

Open: 50 cents to $1 higher.

Follow-through support is quickly stepping into the cattle complex Wednesday morning with prices surging to gains near $1 per cwt higher in front-month futures. This has helped to spark additional buyer support and bounced prices well off of market lows posted last week. The potential to bring some needed market stability and trader interest back into the complex before the end of the year may help to elevate additional buyer activity through early January. Cash lean index for 12/25 is listed at $149.72, up 0.34. Open interest Tuesday lost 388 positions (52,650).

LEAN HOGS:

Open: Steady to 30 cents higher.

Firm gains have quickly developed across the entire livestock market Wednesday morning following the support seen in the complex early in the week. This is pushing nearby contracts above November highs and is sparking underlying technical buyer activity at the end of the year. Volume is still expected to remain light, although the tone of the market remains firm. Cash bids are steady to $0.75 per cwt higher. Most bids are steady to 50 cents higher. Open interest Tuesday added 2,916 positions (231,700). Spot month February added 959 positions (87,853) and April added 1,442 positions (62,112). Cash lean index for 12/22 is $61.62, down 0.14. DTN projected slaughter for Wednesday is 465,000 head. Saturday runs are expected to near 385,000 head.

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

(SK)

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