DTN Before The Bell-Livestock

GENERAL COMMENTS

Moderate pressure is seen through the livestock complex Tuesday morning with traders backing away from early-week gains. The overall limited trade volume seen in the morning and expected sluggish interest seen through the rest of the week is likely to leave markets unsupported through most of the morning. Corn markets are lower in light early trade. Stock markets are lower, with the Dow Jones 502 points lower and the Nasdaq down 144 points.

LIVE CATTLE:

Open: Steady to 70 cents lower. Light pressure is slowly developing across the live cattle complex early Tuesday morning with prices in nearby contracts hovering 50 to 70 cents lower during initial trade. The pullback in feeder cattle trade as well as limited overall trade volume expected through the rest of the complex is leaving markets generally unsupported following firm gains Monday. It is expected that markets will hover within the current trading range over the near future, as traders seem to focus on maintaining current price levels due to little long term direction developing through the holiday week. Cash cattle interest remains extremely quiet early Tuesday with bids and asking prices still generally unestablished. With the holiday on Thursday it will the desire of both sides to get business done by Wednesday afternoon in order to not have to return to finish cash market business on Friday. But it is still uncertain if any bids will develop Tuesday or if many will continue to monitor overall market moves waiting until early Wednesday. Open interest Monday fell 407 positions (337,836). Spot month December contracts lost 3,024 positions (49,302) and February contracts added 1,899 positions (123,450). DTN projected slaughter for Tuesday is 119,000 head.

FEEDER CATTLE:

Open: Steady to 60 cents lower. Early trade Tuesday is weak in very limited activity. The overall back and forth in feeder cattle prices seen Monday is continuing to spark some underlying activity within a moderate but choppy range. The bounce higher in soybean markets following sharp early-week losses is putting more emphasis on overall production costs which is impacting front month January futures early Tuesday morning. Limited trade is expected to be seen through the entire week with traders seemingly focusing on outside market shifts rather than cattle market moves. Cash index for 11/16 is listed at $147.09, down 0.74. Open interest Monday fell 2,080 positions (47,579).

LEAN HOGS:

Open: Steady to $1 lower. Light to moderate price pressure is developing across the lean hog complex following the strong market shift higher over the last couple of weeks. Nearby lean hog futures have rallied over $6 per cwt in the last couple of weeks, creating additional underlying support through the month of November. The focus on very light trade volume expected through the rest of the week could keep markets in a narrow range through the next couple of days. As more trader activity is seen Tuesday, it is possible that additional price support may return to the complex late in the day. Cash hog trade Tuesday is expected $1 lower to $1 higher. With most bids steady. Open interest fell 4,490 positions (227,728). Spot month December slipped 3,302 positions (43,786) and February liquidated 3,347 positions (74,813). Cash lean index for 11/16 is $58.51 down 0.59. DTN projected slaughter for Tuesday is at 477,000 head. Saturday runs are expected to be seen at 361,000 head.

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

(BAS)

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