DTN Before The Bell-Livestock

Limited Trade Keeps Prices Mixed

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

Mixed trade is seen in all markets Thursday. Hog futures continue to lead the market lower with triple-digit pressure developing in nearby contracts. Corn markets are lower in light trade. Stock markets are lower, Dow Jones is 154 points lower while Nasdaq is down 56 points.

LIVE CATTLE:

Open: Mixed. Live cattle futures have once again been contained to a narrow but mixed trading range early Thursday morning. This has sparked some additional uncertainty with October contracts unchanged in the early minutes of trade. The rest of the complex is hovering from 25 cents lower to 5 cents higher as traders balance between short-covering and follow-through selling pressure following losses earlier in the week. Some additional market shifts are expected the next couple of sessions, but the driver is likely to be in feeder cattle trade and outside grain market shifts. More cash cattle interest is expected early Thursday morning following light trade in the North Wednesday. Dressed cattle sold at $174 per cwt, generally steady with last week, while live trade was mostly $110 to $111 per cwt, which is steady to weak from last week's price levels. Additional interest is expected in the next day or two, especially in the South. Open interest Wednesday added 2,599 positions (332,520). Spot-month October contracts lost 654 positions (8,032) and December contracts added 1,136 positions (123,894). DTN projected slaughter for Thursday is 118,000 head.

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FEEDER CATTLE:

Open: Mixed. Firm gains have slowly but steadily developed in nearby trade, but the lack of consistency and pressure in most 2019 contract months has added underlying concern to the entire complex. Nearby feeder cattle futures have fallen $3 to $4 per cwt during early October, while January futures have posted a $7 per cwt loss in the same period of time. This has sparked underlying uncertainty about the ability to bring commercial buyers back. The cash index for 10/16 is listed at $155.14, down $0.22. Open interest Wednesday gained 96 positions (56,100).

LEAN HOGS:

Open: Mixed. Firm pressure is once again developing across nearby lean hog trade with triple-digit losses in December and February futures contracts. This pressure is setting a weaker tone across the entire complex, which is sparking some additional concerns of follow-through weakness through the end of the week and the near future. Even though deferred trade is holding light-to-moderate gains, the focus on the nearby contracts that have adjusted lower the last two sessions is the main focus of most traders. Cash hog trade Thursday is expected steady to $2 lower. Most bids are steady to $1 lower. Open interest fell 4,418 positions (222,245). Spot-month December slipped 1,229 positions (102,646) and February added 689 positions (41,375). Cash lean index for 10/16 is $68.17 down $0.42. DTN projected slaughter for Thursday 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