DTN Before The Bell Livestock

GENERAL COMMENTS:

Livestock futures are mostly higher Tuesday morning as renewed buyer interest in lean hogs appears to be the stimulus to attract buyer support back to cattle futures. Traders will closely monitor outside market moves as well as the direction of meat values, which will indicate fundamental market direction going into the holiday season. Corn is trading higher in light to moderate trade. Stock markets are lower in limited morning trade. Dow Jones is 326 points lower with NASDAQ down 40 points.

LIVE CATTLE:

Open: Mixed. Initial live cattle moves posted light to moderate gains Tuesday morning as traders focus on the light but growing support seen early in the week. Friday's aggressive price adjustment seems to have pushed prices to initial support levels, although trader concerns about the ability to advance beef prices and cash cattle trade over the near future seems to be limiting expectations of renewed buyer interest any time soon. With live cattle futures hovering in the middle of the recent trading range, traders seem to be finding comfort in not "rocking the boat" and could allow price levels to wander within these parameters for the near future. Cash cattle markets are once again quiet Tuesday morning, which is no surprise to anyone. The Cattle on Feed report scheduled for the end of the week may further delay cash market developments and could push most active trade until Thursday or Friday, and possibly late Friday afternoon. Asking prices and bids are still not reported, which continues to add uncertainty about how last week's futures price pressure will impact packer desire to purchase cattle ahead of Thanksgiving week. Open interest added 400 positions (275,792). December contracts lost 2,889 positions (40,143) and February contracts added 1,339 positions (104,990). DTN projected slaughter for Tuesday is 121,000 head.

FEEDER CATTLE:

Open: Mixed. Feeder cattle futures continue to remain caught between elevated feed prices as corn and soybean prices continue to surge higher and renewed buyer support in live cattle trade. This is leaving morning trade mixed in a narrow to moderate range with growing uncertainty about which side of the equation will be able to attract more trader interest. The focus on beef values and cash cattle trade at the end of the week will play a significant role in late November feeder cattle futures, but production costs will continue to be front and center on buyers' minds in the coming weeks and months. Cash index for 11/13 is $137.68, up 0.33. Open interest Monday fell 156 positions (35,652).

LEAN HOGS:

Open: Steady to $1 Higher. Gains in lean hog futures have quickly spread through the entire hog complex with all contracts posting positive price moves as buyers steadily but cautiously move back into the market. February and April contracts continue to be the main focus with prices 80 to 90 cents per cwt higher during early trade. The inability to spark additional selling pressure may be just enough momentum to move prices away from recent lows. If nearby lean hog futures are able to establish solid support levels over the next couple of days, the potential to hold prices between $64 and $68 per cwt through the next couple weeks looks promising. The wide market shifts in wholesale pork prices will continue to be a major focus through the end of the week as traders try to get a handle on short- and long-term pork demand growth. Cash hog bids are expected $1 lower to $1 per cwt higher, with most bids steady 50 cents higher. Open interest fell 2,296 positions (205,071). December fell 2,633 positions (35,005) and February gained 345 positions (76,054). Cash lean index for 11/13 is $70.08, down 0.76. DTN projected slaughter for Tuesday is 492,000 head. Saturday runs are expected at 289,000 head.

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

Editor's Note: See DTN Livestock Analyst ShayLe Stewart's complete 2021 market outlook live by attending the DTN Ag Summit, Dec. 7-9. This year's event is virtual, and as a DTN subscriber you can attend for FREE. Our premier farmer and rancher event features markets updates from ShayLe, DTN Lead Analyst Todd Hultman and a weather outlook by Senior Ag Meteorologist Bryce Anderson. Other speakers include: U.S. Ambassador Kip Tom; Ken Eriksen and Paul Hughes of IHS Markit; Microsoft Chief Scientist Ranveer Chandra; personal development speakers David Horsager and Jon Gordon; farmers Reid and Heather Thompson; farm blogger Meredith Bernard, and many more.

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