DTN Before The Bell-Livestock

GENERAL COMMENTS

Narrow trading ranges have developed through most livestock trade early Thursday. The focus on limited follow-through buying activity in live cattle and feeder cattle markets is being offset by light to moderate pressure in the hog complex. Traders are putting more emphasis on outside markets during morning trade as soybean market shifts seem to be the main draw for most traders Thursday. Corn markets are lower in light early trade. Stock markets are higher. Dow Jones is 65 points higher with Nasdaq up 10 points.

LIVE CATTLE:

Open: Steady to 20 cents higher. Limited buyer support has moved into live cattle trade with traders still trying to defend the strong market rally which developed midweek. Prices are trading 10 to 20 cents per cwt in nearby contracts, as light buyer activity is seen in these markets, although there is less evidence that market support will develop in deferred contracts through the next couple of hours. The pullback in grain trade is causing some questions surrounding not only production costs, but overall ag commodity movements as the news stories over the last couple of days have been consumed by potential China buying activity. Cash cattle activity should improve through the morning, but as of now, there are just a few live bids surfacing at $115 per cwt. These bids are listed in Texas, as more interest is likely in other areas through the day. Active trade may still be delayed until sometime Friday. Asking prices are seen from $121 to $122 live and $190 dressed. Open interest Wednesday added 3,808 positions (343,641). Spot month December contracts lost 795 positions (11,283) and February contracts fell 422 positions (135,290). DTN projected slaughter for Thursday is 119,000 head.

FEEDER CATTLE:

Open: 20 to 40 cents higher. Light follow-through buying activity is slowly developing across feeder cattle trade. This is allowing for increased overall support to be seen through the entire complex, moving prices above $148 per cwt in front month futures. Current prices are still nearly $1.50 per cwt below initial resistance levels, which could contain price levels in the wide but choppy sideways trend seen over the last several months. Cash index for 12/11 is listed at $144.97 up $0.01. Open interest Wednesday fell 274 positions (48,957).

LEAN HOGS:

Open: Steady to 50 cents lower. Limited pressure is seen through lean hog trade with most of the focus through the morning on the potential movement of soybeans to China. The expectations that overall buying may continue to develop in the soybean complex as a result of the trade negotiations is adding even more pressure to hog values with the concern of long-term production costs. There continues to be limited longer-term direction, but the focus on the market has pulled back from midweek gains in the opening minutes of trade. Cash hog trade is steady to $1.00 lower. Most bids are steady. Open interest added 1,410 positions (211,712). Spot month December fell 741 positions (13,264) and February slipped 19 positions (78,002). Cash lean index for 12/11 is $55.54 down 0.44. DTN projected slaughter for Thursday is at 477,000 head. Saturday runs are expected at 225,000 head.

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

(BAS)

Copyright 2018 DTN/The Progressive Farmer. All rights reserved.