DTN Before The Bell-Livestock

GENERAL COMMENTS

LIVE CATTLE:

Open: 7 cents lower. December cattle are down 0.25 early in Friday's session, lightly influenced to the downside by a higher U.S. dollar and lower stock market while traders wait for cash business to develop. This week's boxed beef prices have been roughly steady for choice cuts and down a couple dollars for selects. Also, Thursday's beef exports were neutral at 16,000 mt, so it is difficult to see why the futures are so determined to challenge their highs. Cash cattle are expected to be steady to $1 lower Friday, but have not seen much action yet. It was encouraging to see bids hold at $109 Thursday after news of new trade negotiations with Japan came out. Thursday's open interest increased 666 to 328,583. October contracts dropped 2,737 to 37,537 and December added 1,426 to 123,493. Dow Jones projected cattle slaughter for Friday at 118,000 head, up from 114,088 a year ago. .

FEEDER CATTLE:

Open: Even. November feeder cattle are down 0.40, negatively influence by outside markets early Friday. Among November feeder prices, $161.50 was last year's high and stands as the line of resistance to watch moving forward. In spite of last week's bearish on-feed numbers, price behavior in the futures market continues to suggest that available supplies may be tighter than expected. So far, cattle and feeder prices continue to find support from increased beef demand and a positive outlook for the economy, in spite of this year's trade concerns. The Feeder Cash index for 9/26 is listed at $158.13, up 3.67 from a week ago. Thursday's total open interest increased 620 to 56,103.

LEAN HOGS:

Open: 52 cents higher. December hogs are up 0.37 after USDA reported a 3.0% in hog and pig inventory for September 1, in line with expectations. The June-August pig crop was also up 3%, as were both numbers for breeding and marketing hogs. A 2% increase in the farrowing intentions for September-November was officially more than expected, but probably surprised no one. After four years of expanding hog supplies, the overall outlook for hog prices remains bearish, but it's nice to see that retail demand still responds to low prices. Carcass prices are up nearly two dollars from last Friday and the Lean Hog Index for 9/26 was estimated at $65.34 up $7.90 from a week ago. Cash hog trade is expected to be steady early Friday. Thursday's total open interest fell 135 to 217,570. Open interest in the October contract dropped 2,052 to 23,660 and December contracts increased 681 to 101,806. Dow Jones projected hog slaughter for Friday at 463,000 head, up from 451,895 a year ago.

Todd Hultman can be reached at Todd.Hultman@dtn.com

(SK)

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