DTN Before The Bell-Livestock

Limited Volume Keeps Prices Mixed

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

Firm pressure is seen in cattle trade early Friday as traders try to look for additional longer-term direction from both livestock markets as well as outside trade activity. This could limit overall volume through most of the morning. Corn markets are lower in light early trade. Stock markets are higher, Dow Jones is 194 points higher while Nasdaq is up 82 points.

LIVE CATTLE:

Open: 30 to 50 cents lower. General market weakness is slowly but steadily developing in live cattle trade. Front-month October futures which have been generally insulated from previous market pressure seem to be taking the brunt of selling activity Friday morning. This is setting a weaker tone through the entire live cattle complex during the morning, although trade volume remains sluggish. Cash cattle bids are redeveloping with live bids of $111 seen in most areas. This is fully steady with trade seen Thursday. The moderate trade seen Thursday is expected to have taken care of most of the needs in the North, although a few clean up deals may still develop through the day Friday. Southern trade still needs to develop with very limited activity seen in these areas earlier in the week. This could stretch toward afternoon trade. Open interest Thursday fell 1,789 positions (329,286). Spot month October contracts lost 1,313 positions (6,719) and December contracts slipped 1,006 positions (122,894). DTN projected slaughter for Friday is 118,000 head.

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FEEDER CATTLE:

Open: Steady to 50 cents lower. Light to moderate selling pressure is evident through the entire complex with nearby contracts holding a narrow trading range of 30 to 35 cents per cwt lower. This pullback from Thursday days is putting even more emphasis on the underlying weakness in the cattle complex and potential for increased market pressure from outside trade to add uncertainty through the market. Cash index for 10/17 is listed at $155.50, up 0.36. Open interest Thursday fell 343 positions (55,660).

LEAN HOGS:

Open: 50 cents to $1.50 higher. Strong gains have quickly developed in nearby lean hog futures as traders try to establish some sense of market stability at the end of the week. The buyer support is not expected to be seen as a change in overall market direction, just end-of-week market positioning and short covering through the Friday session. Cash hog trade Friday is expected steady to $2 lower. Most bids are steady to $1 lower. Open interest added 1,038 positions (223,270). Spot month December slipped 443 positions (102,211) and February added 1,508 positions (42,878). Cash lean index for 10/17 is $67.76 down 0.46. DTN projected slaughter for Friday is at 467,000 head. Saturday runs are expected at 232,000 head.

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

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Rick Kment