DTN Before The Bell-Livestock

GENERAL COMMENTS

December cattle are modestly higher early Friday, but still keeping a sideways tone for the week while the cash market gets ready to do business under favorable circumstances for higher prices. Hogs are roughly even on Friday and for the week, benefiting from active pork demand.

LIVE CATTLE:

Open: 40 cents higher. December cattle are up $0.37, continuing to hold roughly sideways this week while boxed beef prices have made impressive gains. That seems like a rather modest performance for the December contract, but the day is still young, and we should learn more about the cash market Friday afternoon. Cash cattle are expected to be steady to $2 higher on Friday with outside markets looking supportive. Total open interest increased 4,214 to 352,271 on Thursday's slightly higher trade. December contracts dropped 97 to 123,015 and February increased 1,061 to 92,419.

FEEDER CATTLE:

Open: 22 cents higher. January feeder cattle are up $0.27 early, also holding mostly sideways on the week and staying above support at $148 while beef demand is active. Corn prices are steady early Friday after getting a little bump higher on Thursday. Friday morning's larger-than-expected increase in U.S. non-farm payrolls continues to make the economy look good, which is good news for the livestock sector. The Feeder Cash index for 10/31 is listed at $154.18, up $0.53 from a week ago. Total open interest decreased 310 to 48,707 on Thursday's modestly higher trade.

LEAN HOGS:

Open: 42 cents lower. December hogs are unchanged early Thursday, staying below the resistance we've been talking about all week at $60. Pork carcass prices dipped lower again Thursday, but are not doing bad in the face of the recent higher slaughter pace. If eventually needed, the October low near $51 should offer support with ongoing concerns about African swine virus in China also a supporting factor. The Lean Hog Index for 10/31 was estimated at $64.07, down $0.96 from a week ago. Cash hog trade is expected to be steady to $1 lower early Friday. Total open interest dropped 1,477 to 223,582 on Thursday's slightly lower trade. Open interest in the December contract fell 3,646 to 87,101 while February contracts increased 856 to 47,964.

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

Follow him on Twitter @ToddHultman

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