DTN Before The Bell-Livestock

Mixed Price Shifts Develop Early Tuesday

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

Firm gains have quickly redeveloped in lean hog futures trade with early price support moving into the complex. Cattle trade remains mixed to mostly lower following general pressure seen in feeder cattle trade and overall lack of early buyer interest. Corn markets are lower in light early trade. Stock markets are higher, Dow Jones is 166 points higher while Nasdaq is up 63 points.

LIVE CATTLE:

Open: Mixed. Narrowly mixed trading ranges are seen early Tuesday morning as traders try to adjust to the late day market surge seen in the complex Monday. Prices are hovering from 20 cents lower to 20 cents higher with additional pressure slowly developing in nearby contracts. A combination of follow through buying and position adjustments is expected to be seen through the complex as traders look for increased overall direction through the next couple of trading sessions. Cash cattle activity is still quiet with no evidence of bids or asking prices at this point. Active trade is expected to be pushed to the last half of the week with bids not likely until Wednesday or later. Open interest Monday liquidated 3,045 positions (327,506). Spot month October contracts lost 1,919 positions (10,146) and December contracts slipped 526 positions (122,438). DTN projected slaughter for Tuesday is 120,000 head.

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FEEDER CATTLE:

Open: Mixed. Early trade has hovered in a moderate to wide trading range with pries seen from 80 cents lower to 10 cents higher. The overall lack of support in nearby contracts is pulling back from late day gains seen Monday and creating some uncertainty about markets stability that has shifted into the market. Outside market direction is likely to play an large role in the overall moves seen in feeder cattle through the morning. Cash index for 10/12 is listed at $156.26, down 1.24. Open interest Monday fell 263 positions (56,377).

LEAN HOGS:

Open: Steady to 50 cents Higher. Light to moderate buying support has moved back into the lean hog complex following strong triple digit gains seen early in the week. December contracts currently are leading the complex higher with a 50 cent rally as limited volume is slowly but steadily moving back into the complex during the first few minutes of trade. Confirmed additional gains through the first couple days of the week could quickly change the overall tone of the market. Cash hog trade Tuesday is expected steady to $1 lower. Most bids are $1 lower. Open interest added 2,618 positions (232,203). Spot month December added 1,473 positions (102,667) and February gained 517 positions (40,467). Cash lean index for 10/12 is $68.75 down 0.24. DTN projected slaughter for Tuesday is at 477,000 head. Saturday runs are expected at 232,000 head.

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

(SK)

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Rick Kment