DTN Before The Bell-Livestock

GENERAL COMMENTS

Light trade is expected through the entire trading session with traders focusing on the overall lack of interest on the last session of 2017. There is expected to still be some end of year positioning being done over the next few hours as traders prepare for the upcoming holiday weekend. Corn futures are lower in light trade. Stock market futures are lower, Dow Jones is 2 points lower while Nasdaq is down 7 points.

LIVE CATTLE:

Open: Mixed. Strong follow-through gains are seen in the very lightly traded spot month December contract with a 90 cent rally redeveloping as traders try to roll out of these contracts. Light pressure is seen in the rest of the market with losses of 10 to 30 cents per cwt seen through the market. This may set the tone for a very sluggish market during the entire trading day. And this may limit additional trade activity before year end. Cash cattle markets are still quiet early Friday morning with packer interest expected to improve significantly through the morning. Asking prices are at $125 to $126 live basis and $195 and higher dressed. Open interest Thursday added 713 positions (333,144). Spot December lost 596 positions (329) and February contracts added 145 positions (120,347). DTN projected slaughter for Friday is 118,000 head.

FEEDER CATTLE:

Open: Mixed. Light trade is seen in the feeder cattle futures complex with traders focusing on the previous market support and the potential to square positions at the end of the year. With the markets closed Monday and long holiday weekend, traders are expected to focus on closing out the year. This may keep prices in a narrow to moderate range through most of the session as nearby contracts have held early pressure of 40 cents per cwt in initial trade Friday. Cash lean index for 12/26 is listed at $148.36, down 0.36. Open interest Thursday lost 238 positions (51,745).

LEAN HOGS:

Open: 30 to 60 cents higher. Moderate support has continued to develop through the entire lean hog futures complex with traders focusing on additional buyer activity through the rest of the hog complex. Overall trade is likely to remain sluggish through most of the morning, although a firm undertone is likely to continue during the rest of the session. This is likely to bring some additional buyer interest back to the table during early January with the focus on firming pork values. Cash bids are steady to $1 per cwt higher. Most bids are 50 cents higher. Open interest Thursday added 3,217 positions (239,136). Spot month February fell 195 positions (87,688) and April added 1,857 positions (67,134). Cash lean index for 12/26 is $61.59, down 0.03. DTN projected slaughter for Friday is 465,000 head. Saturday runs are expected at 384,000 head.

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

(SK)

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