DTN Before The Bell-Livestock

GENERAL COMMENTS

February cattle are up 0.55 early after USDA said cattle on-feed were up 2% from a year ago. February hogs are up 0.40, benefiting from USDA's report of 2% increases in December 1 hog inventory and the fall pig crop.

LIVE CATTLE:

Open: 15 cents higher. February cattle are up 0.55, showing some early benefit from Thursday's on-feed report of a 2% annual increase. Prices are also continuing to hold roughly sideways near their highest prices of the year. Boxed beef prices bounced back higher Thursday and are now roughly steady on the week. The stock market remains a bearish concern, starting a little higher after falling to new 2018 lows Thursday with concerns about a government shutdown, the resignation of the U.S. Defense Secretary and the state of the world economy. Cash cattle are expected to be steady on Friday with Dow Jones futures starting a little higher. Dow Jones news service projects Friday`s cattle slaughter at 117,000, up from 116,700 a year ago. Total open interest increased 1,630 to 351,416 on Thursday's slightly higher trade. February contracts fell 314 to 134,508 and April increased 1,273 to 94,577.

FEEDER CATTLE:

Open: 15 cents lower. March feeder cattle are up 0.30 early, still holding above support at $140.00 with no help from this week's outside markets, but some help from this week's lower corn price. Corn prices are steady to higher early Friday after dropping a dime the past two days. The Feeder Cash index for 12/19 is listed at $145.74, down 0.66 from a week ago. Total open interest fell 325 to 49,264 as Thursday's prices traded higher.

LEAN HOGS:

Open: 12 cents lower. February hogs are up 0.40 early Friday, showing some bullish response from USDA's report of a 2% higher December 1 hog inventory. The fall pig crop was also estimated up 2%, which is less than expected. Overall, February hog prices are holding sideways and may be finding support near $62.00. Pork carcass prices are a couple dollars lower this week, showing bearish pressure from the high slaughter pace. African swine virus in China remains a bullish concern and Thursday's export sales showed a strong appetite from Mexico. Dow Jones expects Friday's hog slaughter at 472,000, up from 458,864 a year ago. The Lean Hog Index for 12/18 was estimated at $55.00 down $0.54 from a week ago. Cash hog trade is expected to be steady to $1 lower early Thursday. Total open interest was down 231 to 196,234 on Thursday's quietly lower trade. Open interest in the February contract fell 1,389 to 74,332 while April contracts increased 999 to 46,904.

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

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