DTN Before The Bell-Livestock

GENERAL COMMENTS

December hogs and cattle are starting a little higher Monday with help from Friday's higher cash cattle prices and a higher start in the Dow Jones. December hog traders will be watching for a possible test of resistance at $60 this week.

LIVE CATTLE:

Open: 15 cents higher. December cattle are up $0.15, finding early support from Friday's higher cash trade. After six days of up/down action that went almost nowhere, Friday's higher cash prices may have given cattle the boost they need, trading $3 to $5 higher on the week around $114 to $115 for live and up $6 on the week at $180 for dressed. It also helps that the Dow Jones futures are starting higher Monday, easing last week's anxieties. Cash cattle are expected to be quiet Monday, but steady to $2 higher. Friday's total open interest increased 714 to 337,046. October contracts dropped 670 to 1,058 and December dropped 2,524 to 119,913. Dow Jones projected cattle slaughter for Monday at 118,000 head, up from 117,427 a year ago.

FEEDER CATTLE:

Open: 35 cents higher. January feeder cattle are up $0.32 early, holding above October's support at $148 while active demand for beef continues to help prices stay steady, at least. Even though corn prices are up from their September lows, they are still not presenting a significant threat to feeder demand. Outside markets have been jittery lately, but last week's GDP report of 0.9% growth in the third quarter was slightly more than expected and may have helped to calm recent concerns. So far, cattle and feeder prices continue to find support from increased beef demand and a positive outlook for the economy, in spite of this year's trade concerns. The Feeder Cash Index for 10/25 is listed at $154.01, down 1.35 from a week ago. Friday's total open interest increased 523 to 52,825.

LEAN HOGS:

Open: 57 cents higher. December hogs are up $0.70 early Monday at $58.62, getting closer to challenging their four-month high near $60. Carcass prices were a couple dollars lower last week, but are still holding firm in the face of increased slaughter numbers, and that seems to be giving futures traders some encouragement. The Lean Hog Index for 10/25 was estimated at $64.61, down $2.61 from a week ago. Cash hog trade is expected to be steady to mixed early Monday. Friday's total open interest increased 1,091 to 225,377. Open interest in the December contract dropped 804 to 96,449 and February contracts increased 638 to 45,413. Dow Jones projected hog slaughter for Monday at 475,000 head, up from 443,836 a year ago.

Todd Hultman can be reached at Todd.Hultman@dtn.com

(SK)

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