DTN Before The Bell Livestock

GENERAL COMMENTS:

Following strong price shifts Wednesday, livestock traders are showing little interest in any additional market shifts ahead of the Christmas weekend. With markets closing near noon due to holiday trading schedules, even more traders are absent from the complex. The focus on elevated cash cattle trade this week is likely to bring renewed interest Monday. Corn is trading higher in light to moderate trade. Stock markets are mixed in limited morning trade. Dow Jones is 186 points higher with NASDAQ down 32 points.

LIVE CATTLE:

Open: Mixed. Limited activity is seen early Thursday morning as the market has essentially moved into "holiday mode" with markets closing early Christmas Eve and trader participation very light. Narrowly mixed price moves are adjusting positions following strong gains Wednesday, although limited direction is expected in the few hours before markets close for the long holiday weekend. Cash cattle trade is expected to be wrapped up for the week following moderate movement Wednesday at higher money. Live cattle sold for $110 in most areas, while dressed business posted sales at mostly $172 per cwt. Feeders are expected to aggressively price cattle early next week, attempting to further the end of the year support. Open interest added 458 positions (287,286). December contracts lost 591 positions (2,396) and February contracts slipped 671 positions (112,312). DTN projected slaughter for Wednesday is 116,000 head.

FEEDER CATTLE:

Open: Steady to 20 cents lower. Narrow losses are trickling into a very lethargic and lightly traded feeder cattle market. This is likely to keep prices within a narrow range, but able to maintain most of the midweek market gains seen Wednesday. More interest is likely early next week as traders try to close the year out on a positive note. Cash index for 12/21 is $139.74, up 0.18. Open interest Wednesday added 158 positions (45,377).

LEAN HOGS:

Open: Mixed. Lean hog futures are lightly traded with very limited interest seen Thursday. The impact of the quarterly hogs and pigs report is partially limited by the lack of trade in the market. It is uncertain if the report will have a delayed reaction next week when more traders return to the complex, but the overall impact of the report is likely to be muted based on limited direction from market expectations in the first place. The strong gains Wednesday seem to be holding in most contracts, although light adjustments are expected in the coming hours before markets close for the Christmas holiday. Cash hog bids are expected $1 lower to $1 per cwt higher, with most bids steady 50 cents lower. Open interest added 1,773 positions (183,938). February fell 142 positions (78,947) and April added 750 positions (42,138). Open interest in pork cutout futures added 29 positions (670). Cash lean index for 12/21 is $62.04, down 0.51. DTN projected slaughter for Thursday is 262,000 head. Saturday runs are expected at 67,000 head.

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

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