DTN Before The Bell-Livestock

GENERAL COMMENTS

December cattle and hogs are off to higher starts early Wednesday with help from Tuesday's higher boxed beef prices and pork carcass prices that appear to be holding their own. The Dow Jones Industrial Average is up 220 points early as most economic measures still point to positive growth ahead.

LIVE CATTLE:

Open: 32 cents higher. December cattle are up $0.37, still finding support in their sideways range with extra help from this week's higher boxed beef prices and higher start in the stock market. Cash cattle are expected to be steady to $2 higher early Wednesday, although we don't anticipate significant business until at least Thursday. Tuesday's total open interest increased 2,890 to 345,263. October contracts dropped 359 to 398 and December increased 644 to 122,644. Dow Jones projected cattle slaughter for Wednesday at 118,000 head, up from 117,767 a year ago.

FEEDER CATTLE:

Open: 5 cents lower. January feeder cattle are up $0.52 early, still holding above support at $148 by a narrow margin. December corn is down 2 cents, not offering much threat to feeder prices as harvest is making methodical progress. So far, cattle and feeder prices continue to benefit from increased beef demand and a positive outlook for the economy, in spite of this year's trade concerns. The Feeder Cash index for 10/29 is listed at $153.66, down $1.40 from a week ago. Tuesday's total open interest decreased 844 to 48,959.

LEAN HOGS:

Open: 70 cents higher. December hogs are up $0.85 early Wednesday, once again challenging resistance at $60. Carcass prices are up slightly so far this week, and so far, are not showing much pressure from the increased pace of hog slaughter. As long as that holds true, it is good news for hog prices, now trading at their highest level in over four months. The Lean Hog Index for 10/29 was estimated at $63.93, down $2.02 from a week ago. Cash hog trade is expected to be steady to $1 lower early Wednesday. Tuesday's total open interest increased 133 to 225,935. Open interest in the December contract dropped 1,502 to 94,130 and February contracts increased 342 to 45,613. Dow Jones projected hog slaughter for Wednesday at 475,000 head, up from 462,009 a year ago.

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

Follow him on Twitter @ToddHultman

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