DTN Before The Bell-Livestock

GENERAL COMMENTS

Mixed trade is seen early Tuesday morning as traders continue to focus on the ability to bring limited buyer interest back into the live and feeder cattle market. The pressure in lean hog trade remains moderate, but is focusing on lackluster interest seen during early November. Corn markets are lower in light early trade. Stock markets are higher, Dow Jones is 77 points higher while Nasdaq is up 68 points.

LIVE CATTLE:

Open: Steady to 30 cents higher. Light gains have slowly developed early Tuesday morning with traders focusing on the ability to bring additional interest back into the complex. This may spark some additional underlying support following the sharp tumble prices took on Monday. Trade is expected to remain limited through the first couple hours of trade Tuesday morning although outside market direction may be focused on by many traders through the next couple of days. Cash cattle markets remain quiet early in the week with bids and asking prices still undeveloped. It is likely that token bids will be more evident within the next couple of days, but trade may not develop until later in the week. Open interest Monday fell 1,027 positions (353,453). Spot month December contracts lost 3,351 positions (118,163) and December contracts added 955 positions (94,373). DTN projected slaughter for Tuesday is 117,000 head.

FEEDER CATTLE:

Open: Mixed. Firm gains have quickly moved through nearby contracts with traders covering short positions following the strong triple-digit losses seen through the complex. This may add some additional market movement in the market and could bring some stability back to the table. Deferred futures are mixed in a narrow range with very limited interest seen early Tuesday. Cash index for 11/02 is listed at $153.55, down 0.34. Open interest Monday fell 42 positions (49,262).

LEAN HOGS:

Open: 30 to 50 cents lower. Firm losses have quickly developed across lean hog futures trade with increased overall movement through early in the week creating some uncertainty in all markets. Prices have quickly backed away from recent gains, but the wide sideways trend continues to be seen with prices $3 to $4 per cwt from hitting short-term support or resistance levels. This could allow for increased volatility through all markets over the next several trading days. Cash hog trade Tuesday is expected steady to $1.50 lower. Most bids are $1 lower. Open interest fell 1,118 positions (221,793). Spot month December slipped 3,604 positions (79,804) and February added 919 positions (50,048). Cash lean index for 11/2 is $64.08 down 0.04. DTN projected slaughter for Tuesday is at 475,000 head.

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

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