DTN Before The Bell-Livestock

GENERAL COMMENTS

Mixed trade has developed with traders focusing on firm support in nearby live cattle trade. This is helping to bring about additional price support to February and April contract months. Firm price rebounds are seen in hog trade with spot futures posting triple-digit gains. Corn markets are lower in light early trade. Stock markets are higher. Dow Jones is 110 points higher with Nasdaq up 94 points.

LIVE CATTLE:

Open: Mixed. Firm buyer support is redeveloping through morning trade with additional buyer activity moving into nearby contracts. The concern of demand pressure late in the year is still adding some uncertainty to the overall direction of the market, but nearby contracts are moving to new contract highs based on short-term support in the market. Cash cattle markets are still at a standstill with bids and asking prices undeveloped for the week. It is likely that significant interest will not be seen until midweek or later, with active trade pushed to the end of the week once again. Open interest Monday fell 981 positions (387,846). Spot month February contracts slipped 7,301 positions (77,910) and April contracts added 3,175 positions (143,719). DTN projected slaughter for Tuesday is 119,000 head.

FEEDER CATTLE:

Open: Steady to $0.20 lower. Narrow price pressure has trickled into feeder cattle futures as traders look for market stability over the near future. There is growing buyer activity waiting in the wings as traders look for increased overall direction through the complex. Cash index for 1/11 is listed at $144.65 down $0.81. Open interest Monday slipped 71 positions (51,073).

LEAN HOGS:

Open: $0.50 to $1 higher. Firm gains have redeveloped in lean hog trade as traders quickly moved back into the market following the softness the previous two trading sessions. The potential to establish a foothold in the complex once again with markets near support levels is helping to rekindle overall market trade even though the long-term supply concerns still exist. This may add additional underlying activity through the next couple of days. Cash hog trade is steady to $1 higher. Most bids are steady to firm. Open interest added 355 positions (203,671). February fell 6,189 positions (38,524) and April added 3,385 positions (73,360). Cash lean index for 1/11 is $57.21 up 0.50. DTN projected slaughter for Tuesday is 476,000 head. Saturday runs are shaping up to be 180,000 head.

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

(BAS)

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