DTN Before The Bell-Livestock

Narrow Moves Develop Early Friday

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

Limited activity is seen through the entire livestock complex with very narrow market moves seen in cattle trade and most of the hog complex. The strong losses seen Thursday in the cattle market have focused on the lack of underlying support seen through the week. Corn markets are higher in light early trade. Stock markets are lower, Dow Jones is 298 points lower while Nasdaq is down 164 points.

LIVE CATTLE:

Open: Mixed. Narrow price shifts have developed across the complex with prices 10 cents lower to 10 cents higher in generally inactive trade Friday morning. The overall lack of direction at the end of the week is helping to confirm the market weakness seen through the session Thursday. Even though prices continue to hover in a sideways trading range, outside market concerns seen through the week have left the cattle complex weak with limited expectations of support through the end of the month. Cash cattle activity is going into the home stretch of Friday morning with little to no trade activity developed with packers and feedlot managers still a world away with bids and asking prices. Bids are expected to become more evident through the morning, but likely to start out at $109 live and $174 dressed. Asking prices are likely to hold at $115 and higher live and $178 to $180 per cwt dressed. It could be late in the day before active trade is seen. Open interest Thursday gained 4,353 positions (336,669). Spot-month October contracts lost 771 positions (1,728) and December contracts added 1,807 positions (122,651). DTN projected slaughter for Friday is 117,000 head.

P[L1] D[0x0] M[300x250] OOP[F] ADUNIT[] T[]

FEEDER CATTLE:

Open: Mixed. Narrow trading ranges have developed in feeder cattle futures following aggressive triple-digit losses that flooded the market Thursdays. Traders seem to have very little interest at the end of the week with the general weaker tone well established over the last couple of days and most traders unwilling to break from this market direction. A combination of short-covering and follow-through liquidation pressure is expected to be seen over the next couple of hours due to the very limited volume seen Friday morning. Cash index for 10/24 is listed at $153.65, down $1.28. Open interest Thursday gained 220 positions (52,353).

LEAN HOGS:

Open: Mixed. Initial price moves Friday picked up where traders left off Thursday afternoon with narrowly mixed market activity showing very little direction. Nearby contracts are holding 10 to 30 cent gains, while deferred future are currently trading 5 to 25 cents per cwt lower in the first few minutes of limited volume. The strong support seen midweek is helping to cause many traders to focus on potential future gains, but currently there is not enough momentum or interest stepping into the market to show significant market moves in either direction. Cash hog trade Friday is expected steady to $2 lower. Most bids are steady. Open interest added 264 positions (224,309). Spot-month December slipped 1,988 positions (97,258) and February added 349 positions (44,793). Cash lean index for 10/24 is $65.03 down $0.43. DTN projected slaughter for Friday is at 467,000 head. Saturday runs are expected at 192,000 head.

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

(SK)

P[L2] D[728x90] M[320x50] OOP[F] ADUNIT[] T[]
P[R1] D[300x250] M[300x250] OOP[F] ADUNIT[] T[]
P[R2] D[300x250] M[320x50] OOP[F] ADUNIT[] T[]
DIM[1x3] LBL[] SEL[] IDX[] TMPL[standalone] T[]
P[R3] D[300x250] M[0x0] OOP[F] ADUNIT[] T[]

Rick Kment