DTN Before The Bell-Livestock

GENERAL COMMENTS

Early livestock trade remains sluggish through the complex. This is allowing for additional buyer interest across the cattle complex. Hog markets remain sluggish in very minimal trade activity following underlying pressure over the recent trading sessions. The concern that the government shutdown will limit overall market information and may subdue overall market activity could keep prices within a narrow range. It has been announced that AMS Market News will still be releasing reports through the Government shutdown. This will help to make the process a little less difficult for the livestock industry. Corn prices are higher in light trade. Stock market futures are mixed, Dow Jones is 34 points lower while Nasdaq is up 3 points.

LIVE CATTLE:

Open: $1 to $1.50 higher. Traders quickly reacted Monday morning to the losses that developed at the end of last week. This has created strong buyer support moving into the market with prices focusing on the ability to bring additional interest into February futures. There is likely to be some additional buyer interest moving into the market, although the amount of trade through the rest of the morning may limit follow-through activity during the rest of the morning. Cash cattle activity remains undeveloped early Monday morning and will likely draw additional focus from the firm support seen late last week. Show list distribution and inventory taking is expected to be the extend of market interest through the day.. Open interest Friday added 768 positions (354,460). Spot February lost 4,958 positions (53,503) and April contracts gained 1,278 positions (144,901). DTN projected slaughter for Monday is 117,000 head.

FEEDER CATTLE:

Open: Steady to 50 cents higher. Short covering has quickly moved into the feeder cattle markets with initial gains of 20 to 40 cents per cwt in most contracts. It is uncertain just how much additional buyer support will develop over the near future given the uncertainty in outside markets and the overall movement of beef values and availability for accurate market data. Cash lean index for 1/18 is listed at $148.01, up 1.53. Open interest Friday added 529 positions (53,742).

LEAN HOGS:

Open: Mixed. Extremely light trade activity is expected to develop across the complex. There is likely to be some additional market interest moving into the market, although early trading ranges have been limited from 10 cents lower to 5 cents higher. The overall sluggish moves could keep traders on the sidelines. It will be very interesting to see how futures trade reacts to the federal government shutdown, although news has been released that AMS Market News will be open through the shutdown. This will help to allow for cash market information. By being able to provide this information, most of the government data used in the livestock markets, at least on a short-term basis will be able to be available. It will still be determined just what information and release times will continue to be available through this process. Cash hog trade Monday is expected to remain steady to $1 lower. Bids are scattered through the range. Open interest Friday added 65 positions (247,179). Spot month February fell 2,514 positions (30,908) and April added 1,785 positions (105,674). Cash lean index for 1/18 is $73.67, up 0.12. DTN projected slaughter for Monday is expected to be 460,000 head.

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

(SK)

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