DTN Before The Bell-Livestock

Cattle Markets Firm Early Wednesday

Rick Kment
By  Rick Kment , DTN Analyst
(DTN photo by Nick Scalise)

Firm gains have slowly but steadily developed early Wednesday morning across the entire cattle complex. This has helped to confirm gains in live cattle trade seen Tuesday and may spark additional underlying support across the rest of the cattle market through the rest of the week. Corn prices are higher in light trade. Stock markets are lower, Dow Jones is 229 points lower while Nasdaq is down 68 points.


Open: 50 to 80 cents higher. Firm gains have quickly moved into the live cattle complex with traders looking for additional long-term support following the market pressure over the last week. Nearby contracts are trading 60 to 70 cents per cwt higher with the increased overall support in the market likely to attract additional activity through most other contracts. Very little change has yet to be seen in market fundamentals, but the ability to create futures market support through the rest of the week will go a long way in helping to spark underlying market gains. Cash cattle activity is expected to remain silent early Wednesday following just a handful of trade seen in parts of the North. These sales developed at $109.50 per cwt, but are not enough to establish a trend. Asking prices and bids are generally undeveloped in most areas early Wednesday, but interest is likely to increase through the day. Open interest Tuesday gained 1,341 positions (300,946). Spot-month August contracts lost 607 positions (11,277) and October contracts added 488 positions (131,332). DTN projected slaughter for Wednesday is 119,000 head.


Open: 50 cents to $1 Higher. Firm buying has slowly but steadily moved into the feeder cattle complex. This is helping to spark some additional underlying support across the complex following recent market pressure. Although it is uncertain if this buyer activity will be able to hold through the day, the strong bounce higher in the opening minutes of trade is a good sign that traders are looking at recent market pressure reaching or nearing support levels. Cash index for 8/13 is listed at $150.64, down $0.58. Open interest Tuesday lost 771 positions (49,732).


Open: Mixed. Narrow trading ranges have slowly trickled back into the lean hog complex early Wednesday morning. The focus on recent market gains is helping to firm the overall tone of the market, although traders remain extremely cautious about stepping back into the market at this point. Nearby futures are steady to 10 cents lower, while narrow single-digit gains have slowly developed across deferred contract months. Cash hog trade Wednesday is $0.50 to $1.50 lower per cwt. Most bids are $1.00 per cwt lower. Open interest Tuesday added 320 positions (233,482). Spot-month August fell 500 positions (7,492) and October gained 1,105 positions (116,198). Cash lean index for 8/13 is $56.81 down 1.47. DTN projected slaughter for Wednesday is at 465,000 head. Saturday runs are expected at 153,000 head.

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


Rick Kment