DTN Before The Bell Livestock

GENERAL COMMENTS:

Cattle futures are still trying to adjust to the aggressive losses in beef values Monday with prices showing further, but limited losses despite the light volume. Hog trade remains mixed with traders looking for initial support through morning trade. Corn is trading lower in light to moderate trade. Stock markets are lower in limited morning trade. Dow Jones is 45 points lower with NASDAQ down 21 points.

LIVE CATTLE:

Open: Steady to 30 cents Lower. Limited price pressure has slowly trickled back into the market Tuesday morning. Given the aggressive losses in beef cutout levels Monday, the ability to keep losses to a minimum as traders look to establish renewed support levels at the lower price levels. Trade volume is expected to remain sluggish through most of the session which could add further stability through the rest of the week. Cash cattle activity is still expected to remain subdued with asking prices and bids generally quiet through most of the morning. Even with the recent market pressure, feeders are expected to post higher asking prices, although active trade may not develop until the last half of the week. Open interest added 1,774 positions (281,473). December contracts lost 1,234 positions (12,477) and February contracts slipped 40 positions (114,099). DTN projected slaughter for Tuesday is 120,000 head.

FEEDER CATTLE:

Open: Steady to $1 Lower. Strong underlying pressure has quickly redeveloped in nearby feeder cattle futures. Although early market losses are not nearly as aggressive as Monday's price tumble, the lack of support moving into the market is causing weakness through the entire complex. January futures still remain over $3 per cwt above initial support levels, which still creates hope that buyers will step back into the complex over the next several days. Cash index for 12/4 is $138.28, down $0.90. Open interest Monday added 240 positions (39,826).

LEAN HOGS:

Open: Mixed. Initial follow-through pressure developed through the entire lean hog complex at opening bell led to a lack of continued pressure in the market with buyers slowly reemerging Tuesday morning. Gains of 10 to 20 cents per cwt appear to be holding through the morning which could spark steady support through the rest of the Tuesday session. Traders will closely focus on outside market direction while also looking for underlying support in pork values through the week. Cash hog bids are expected $1 lower to $1 per cwt higher, with most bids steady 50 cents lower. Open interest fell 2,122 positions (196,254). December fell 1,665 positions (12,526) and February slipped 555 positions (82,806). Cash lean index for 12/4 is $65.77, down 0.49. DTN projected slaughter for Tuesday is 494,000 head. Saturday runs are expected near 308,000 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.

(c) Copyright 2020 DTN, LLC. All rights reserved.