DTN Before The Bell-Livestock

GENERAL COMMENTS

Firm gains have redeveloped in the cattle complex early Friday morning with spot month December contracts holding a $1 per cwt gain in the early minutes of trade. The overall support through the complex continues to be focused on the ability to extend contract highs through the end of the year. Hog markets are mixed in a narrow range with traders allowing markets to limp into the end of the year without much fanfare. Corn markets are higher in light early trade. Stock markets are higher. Dow Jones is 79 points higher with Nasdaq up 26 points.

LIVE CATTLE:

Open: 10 cents to $1 higher. Expiring December contracts have found additional buyer support late in the week with contracts $1 per cwt higher during early trade. This support is helping to spark some additional follow through buying into nearby contracts with February and April futures holding firm market support. With February futures hovering above $124.50 per cwt and setting contract highs once again, the focus on follow through commercial buying is going to be the main order of business through the rest of the year. Trade volume remains sluggish Friday, and is likely to stay that way through the rest of the session. Cash cattle activity remains dead in the water with bids undeveloped through the morning Friday. It is expected that packer interest will start to improve over the next couple of hours, but feedlot managers seem to be remaining aggressive given the support in futures trade. Asking prices are at $123 live and $198 dressed. It is expected that some trade is needed before the end of the week, although at this point, overall numbers may still remain light. Open interest Thursday increased 7,310 positions (362,930). Spot month December contracts lost 975 positions (827) and February contracts gained 1,888 positions (134,188). DTN projected slaughter for Friday is 117,000 head.

FEEDER CATTLE:

Open: 20 to 40 cents higher. Light follow-through buyer support is trickling into the complex Friday morning. Activity levels remain light as traders seem focused on the overall lack of direction in cash trade and potential firmness through the live cattle market. This is helping to support overall price levels through the end of the week, but has been unable to bring any significant momentum to the feeder cattle complex during late December. Cash index for 12/26 is listed at $147.20 up $0.51. Open interest Thursday gained 20 positions (48,553).

LEAN HOGS:

Open: Mixed. Limited activity is seen through the entire lean hog complex with prices hovering in a narrow range from 15 cents lower to 10 cents higher in most contract months. This is likely to keep markets inactive through the end of the week with traders likely to limp into the weekend, and likely through the end of 2018. Little change to cash or pork values is expected over the next couple of days, allowing markets to remain with additional short-term direction. Cash hog trade is steady to $1.00 lower. Most bids are steady to weak. Open interest added 5,060 positions (208,351). February added 2,663 positions (78,613) and April gained 2,007 positions (53,320). Cash lean index for 12/26 is $53.12 down 0.20. DTN projected slaughter for Friday is 468,000 head. Saturday runs are expected at 421,000 head.

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

(BAS)

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