DTN Before The Bell-Livestock

Cattle Markets Unsettled in Light Trade

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

Livestock futures are mixed in limited trade volume with traders looking for additional support, although very little has changed in the complex over the long holiday weekend. Corn prices are lower in light trade. Stock markets are lower, Dow Jones is 115 points lower while Nasdaq is down 41 points.

LIVE CATTLE:

Open: Mixed. Light to moderate pressure is seen in most live cattle futures with trade hovering from 25 cents lower to 15 cents higher. There is expected to be very little additional long-term support seen through the complex as traders may focus on the inability to spark interest from outside markets as feeder cattle trade is under pressure as well as very limited direction seen in most outside market as traders return from the holiday weekend. Cash cattle interest is sluggish with very limited activity seen through the morning Tuesday. It will likely be the middle to end of the week before trade develops with bids potentially becoming more active over the next couple of days. Open interest Friday added 553 positions (307,244). Spot month August contracts lost 277 positions (2) and October contracts slipped 2,230 positions (119,281). DTN projected slaughter for Tuesday is 120,000 head.

FEEDER CATTLE:

Open: Mixed. Initial feeder cattle trade is mixed to mostly lower as traders continue to follow the weaker trend set through the end of last week. With market shifting lower through the last couple weeks of August, traders will continue to focus on additional market activity and the potential to spark some additional buyer activity through the week. So far, losses have remained sluggish, with traders looking for the potential of increased buyer activity over the next couple of hours. Cash index for 8/30 is listed at $149.98, down 0.11. Open interest Friday lost 84 positions (49,445).

LEAN HOGS:

Open: 50 cents to $1.50 higher. Firm buyer support has moved back into the lean hog complex early September. The focus on firm buyer support at the end of the week and the continued overall market interest likely to develop as traders try to push prices away from recent market lows last month has helped to bring about additional commercial support. Challenges with China hog production have not yet become a major market mover, but traders are starting to keep an eye on how the disease issues in China hog production will impact overall numbers, as this could become a bigger story through the end of the year and early 2019. Cash hog trade Tuesday is expected steady. Open interest Friday added 4,150 positions (226,701). Spot month October gained 1,075 positions (94,070) and December added 2,202 positions (64,691). Cash lean index for 8/30 is $45.63 down 0.22. DTN projected slaughter for Tuesday is at 468,000 head. Saturday runs are expected at 345,000 head.

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

(SK)

Rick Kment