DTN Before The Bell-Livestock

Gains Trickle Into Livestock Futures

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

Firm gains are seen in all livestock markets early Thursday morning as traders try to bring some additional end of the month interest back to the complex. Cash cattle trade remains undeveloped, but cattle futures continue to focus on the potential for trade activity late in the week. Corn prices are higher in light trade. Stock markets are lower, Dow Jones is 69 points lower while Nasdaq is up 17 points.

LIVE CATTLE:

Open: Steady to 30 cents higher. Narrow gains have slowly developed across the live cattle futures following a midweek rally of $1.37 per cwt in front month August trade. Although most of the interest has still moved to the October contract, the focus on overall direction in all nearby trade is helping to bring some price consistency in late 2018 contract months. Firm buyer support is expected to hold, although traders are closely focusing on the direction in both cash markets and outside commodity trade during the last two days of the month. Cash cattle interest remains slow to start Thursday morning, although there are a few bids seen at $106 to $107 per cwt live and $168 to $170 dressed. Asking prices are still firm at $110 and higher live and $174 and higher dressed. Both sides would prefer to wrap things up before late Friday, which may spark more interest Thursday from most packers. Open interest Wednesday added 6,081 positions (305,705). Spot month August contracts lost 652 positions (829) and October contracts gained 277 positions (122,008). DTN projected slaughter for Thursday is 120,000 head.

FEEDER CATTLE:

Open: steady to 50 cents higher. Light buyer support is trickling into feeder cattle trade with very limited market support seen through the week in order to draw traders back to the market. But the push lower over the last two sessions and expectations that firming support will develop in all cattle trade surrounding the holiday weekend is sparking some consistent, but supportive buyer activity in most markets. This could help to bring about increased overall activity late in the session Thursday. Cash index for 8/27 is listed at $150.60, down 0.04. Open interest Wednesday added 707 positions (49,461).

LEAN HOGS:

Open: Mixed. Trade remains sluggish in a narrow trading range, although most contracts are holding light to moderate buyer support. There is growing support expected to develop across the complex with October futures holding a 30 cent gain at $51.85 per cwt. The overall support in the complex may draw additional interest through the end of the week. Cash hog trade Thursday is expected steady to $1 lower per cwt. Most bids are $1 lower. Open interest Wednesday fell 310 positions (223,667). Spot month October fell 2,417 positions (97,320) and December added 1,520 positions (61,374). Cash lean index for 8/27 is $47.09 down 0.70. DTN projected slaughter for Thursday is at 468,000 head. Saturday runs are expected at 124,000 head.

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

(SK)

Rick Kment