DTN Before The Bell-Livestock

Mixed Trade Holds Early Monday

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

Firm gains have developed in spot-month lean hog trade as traders remain unwilling to aggressively step back into the complex early in the week. But there seems to be a growing sense of increased additional support moving into the complex. Corn prices are lower in light trade. Stock markets are higher, Dow Jones is 68 points higher while Nasdaq is up 8 points.

LIVE CATTLE:

Open: Mixed. Live cattle futures remain mixed early Monday morning, although the focus on additional market shifts ahead of the complex is likely to bring about increased trade volume later in the day. Narrow to moderate gains are holding in nearby contracts despite the recent pullback in beef values. But traders are now looking for direction in early 2019 contracts as traders focus on the aggressive premium compared to spot futures and the ability to sustain this buyer support over the next several weeks. Cash cattle markets are undeveloped early Monday morning following light to moderate trade that developed through the day Friday. With prices seen steady to firm late last week, both sides will reassess market needs. The morning is expected to be filled with show list distribution and inventory taking with bids and asking prices not likely to be seen until near midweek. Open interest Friday added 1,001 positions (305,209). Spot month October contracts lost 4,345 positions (101,626) and December contracts added 3,575 positions (86,075). DTN projected slaughter for Monday is 119,000 head.

FEEDER CATTLE:

Open: Mixed. Initial trade activity Monday is hovering in a narrowly mixed price range with prices seen in a single-digit range. The overall lack of support in the complex following buyer support that was extremely active late last week is causing some additional concern through the entire complex. Limited trade is expected to be seen through the entire market with traders focusing on a combination of outside market direction as well as potential shifts in live cattle trade during early week trade. Cash index for 9/6 is listed at $151.32, up 0.28. Open interest Friday added 503 positions (49,939).

LEAN HOGS:

Open: Mixed. Firm follow-through buyer support has firmly moved into front-month October futures with prices mixed to mostly higher in the opening minutes of trade Monday. Outside of spot month October contracts, which are holding $1.20 per cwt gains, narrow support is seen in the majority of contract months as prices are seen 10 cents lower to 55 cents higher. It is expected that very limited additional direction will be seen through the complex during the morning, although traders are looking for additional market moves later in the week. Cash hog trade Monday is expected 50 cents to $3 higher. Most bids are $1 per cwt higher. Open interest Friday fell 862 positions (230,564). Spot month October gained fell 4,003 positions (83,238) and December added 1,662 positions (72,255). Cash lean index for 9/6 is $46.01 up 0.09. DTN projected slaughter for Monday is at 460,000 head.

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

(SK)

Rick Kment