DTN Before The Bell-Livestock

Light Buying Develops Friday

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

Light to moderate buyer interest has swept through cattle and hog trade early Friday. Traders are focusing more on end-of-week adjustments and short-covering activity available early Friday morning. Corn markets are lower in light early trade. Stock markets are lower, Dow Jones is 17 points lower while Nasdaq is down 27 points.

LIVE CATTLE:

Open: 10 to 20 cents lower. Limited gains are seen across live cattle futures with prices contained in a narrow but firm trading range. The fact that live cattle markets have been the least volatile of all livestock trade through the entire week indicates that these narrow market moves may hold through the end of the week. Traders will continue to focus on short and long term demand support, but at this point, prices seem to remain in a comfortable range for most traders. Cash market activity remains quiet Friday morning following light trade that developed in the North at $175 per cwt Thursday. More cash market activity is expected to develop through the day with most of the interest likely to focus on Southern Trade. Open interest Thursday gained 3,812 positions (342,895). Spot month October contracts lost 1,226 positions (27,595) and December contracts added 1,178 positions (129,118). DTN projected slaughter for Friday is 118,000 head.

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FEEDER CATTLE:

Open: 50 cents higher. Light support is slowly trickling back into the feeder cattle market Friday morning. Traders are content to adjust positions at the end of the week following the recent market tumble. If gains hold, this could help to create even stronger support levels through the month of October. Cash index for 10/3 is listed at $157.81, down 0.03. Open interest Thursday added 269 positions (58,376).

LEAN HOGS:

Open: 20 cents to $1 higher. Active short covering is quickly moving into the lean hog futures complex at the end of the week. At this point the aggressive losses are considered to be nothing more than a market correction as prices were unable to break through short-term resistance given the active selling pressure. This could help to establish a firm to sideways market trend over the next couple of weeks if morning gains are able to hold. Cash hog trade Friday is expected steady to $1 lower. Most bids are steady. Open interest Thursday fell 520 positions (227,063). Spot month October fell 1,420 positions (16,319) and December lost 482 positions (103,275). Cash lean index for 10/3 is $69.15 up 0.31. DTN projected slaughter for Friday is at 460,000 head. Saturday runs are expected at 183,000 head.

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

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Rick Kment