DTN Before The Bell-Livestock

GENERAL COMMENTS

Pressure is developing in cattle trade as follow-through pressure is evident. There is growing uncertainty as to just how much additional pressure will develop through the coming days. Corn markets are lower in light early trade. Stock markets are lower, Dow Jones is 256 points lower while Nasdaq is down 143 points.

LIVE CATTLE:

Open: 30 to $1 lower. Limited activity is seen early Wednesday morning, but this is still adding additional price pressure to the entire complex. There is growing pressure in all cattle trade, which is creating additional underlying weakness through midweek. Cash cattle interest remains sluggish early Wednesday morning with bids hard to find in all areas of cattle country. A few asking prices have been noted with prices listed near $114 live and $180 dressed. Although some interest may develop through the day Wednesday, most activity will be pushed off until sometime Thursday or Friday. Open interest Tuesday added 3,528 positions (341,643). Spot month October contracts lost 219 positions (18,120) and December contracts slipped 1,192 positions (127,292). DTN projected slaughter for Wednesday is 120,000 head.

FEEDER CATTLE:

Open: 40 to 90 cents lower. Follow through pressure is quickly becoming reestablished through the feeder cattle complex with increased overall pressure seen in the market as November and January contracts continue to lead the market lower. Nearby contracts still remain firmly planted above short term support levels, but additional aggressive selling through the day could quickly shift this market lower. Initial support levels in November futures remain at $155.92 per cwt. A move below this level could create additional liquidation through the complex. Cash index for 10/8 is listed at $158.45, up 0.40. Open interest Tuesday gained 370 positions (57,431).

LEAN HOGS:

Open: 5 to 50 cents higher. Light buying is slowly but steadily stepping back into the complex Wednesday morning as traders seem to be less worried about follow through pressure after Tuesday's market shift lower. The focus in nearby trade is based on rebuilding underlying support through the complex as firm gains are developing in December and February contract months. Cash hog trade Wednesday is expected steady to $1 lower. Most bids are steady to weak. Open interest Tuesday fell 1,064 positions (228,531). Spot month October fell 552 positions (13,791) and December slipped 1,892 positions (101,443). Cash lean index for 10/8 is $69.33 down 0.03. DTN projected slaughter for Wednesday is at 455,000 head. Early Saturday runs are expected near 153,000 head.

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

(SK)

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