DTN Before The Bell-Livestock

GENERAL COMMENTS

Light pressure is seen through the entire livestock market early Tuesday morning with limited trade volume developing across the complex, but the lack of support focusing on potential fundamental market weakness through the next couple of days. Due to very limited interest in the market at this point, markets could still swing in either direction based on narrow moves in outside markets. Corn markets are steady in light early trade. Stock markets are lower, Dow Jones is 186 points lower Nasdaq is down 23 points.

LIVE CATTLE:

Open: Steady to 25 cents lower. Extremely light pressure is seen through the live cattle complex with traders focusing on additional market pressure through the entire complex. Front-month December contracts are contained in a narrow single-digit loss of 5 to 7 cents per cwt in early trade, although the weaker tone in the market may add some additional pressure through the rest of the morning. The strong shift higher in last week through cash markets is causing some questions of just how much additional short term buyer support may be able to develop in futures trade through the end of November. Concerns of building beef demand through the end of the year has created additional uncertainty through the entire complex. Cash cattle activity still remains dead in the water with bids and asking prices not yet established. Active trade is expected to be pushed off until at least midweek, with late-week trade likely. Open interest Monday gained 2,278 positions (343,322). Spot-month December contracts lost 2,784 positions (37,383) and February contracts added 3,124 positions (132,769). DTN projected slaughter for Tuesday is 118,000 head.

FEEDER CATTLE:

Open: 30 to 60 cents lower. Narrow trading ranges seen in feeder cattle futures late Monday has limited the ability for buyers to move back into the market. This has pushed front month futures 50 to 60 cents lower in the opening minutes of trade, although there continues to be some additional uncertainty through the entire market. Even though trade volume remains sluggish, the lack of renewed buyer support moving into the market is creating additional market pressure through the entire complex. Cash index for 11/23 is listed at $149.86, up 1.59. Open interest Monday added 63 positions (48,993).

LEAN HOGS:

Open: 20 to 60 cents lower. Follow-through pressure is expected to be seen through the lean hog futures trade early Tuesday morning. The focus on readily available hog supplies to packers and limited additional news concerning pork demand through the end of the year is likely to allow prices to hover in the currently wide trading range seen over the month of November. But traders continue to be hopeful that additional buyer support will develop through either mid-December or early 2019 which can add additional price movement to nearby contracts over the coming weeks. Cash hog trade Tuesday is steady to $1.00 lower. With bids scattered through the range. Open interest fell 2,180 positions (227,142). Spot month December fell 2,062 positions (34,080) and February liquidated 1,399 positions (77,313). Cash lean index for 11/23 is $57.44 down 0.40. DTN projected slaughter for Tuesday is at 477,000 head. Saturday runs are expected at 210,000 head.

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

(BAS)

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