DTN Early Word Livestock Comments

Cattle: Lower Futures: Mixed Live Equiv: $271.16 -$1.36*

Hogs: Lower Futures: Lower Lean Equiv: $101.49 -$0.88*

*Based on the formula estimating live cattle equivalent of gross packer revenue. (The Live Cattle Equiv. The index has been updated to depict recent changes in live cattle weights and grading percentages.)

** based on formula estimating lean hog equivalent of gross packer revenue.

GENERAL COMMENTS:

Feeder cattle futures posted limit-lower moves in most of the deferred months. The only exceptions were the November and January contracts. Live cattle futures also traded significantly lower with most contracts around $6.00 lower. Cash trade slipped as well. The trend seems to be headed lower, although with the volatility, cattle are not going down without a fight. The final nail in the coffin of limit-lower prices in feeder cattle Thursday came with the announcement from USDA that a new sterile fly dispersal facility is opening in Tampico, Mexico. This brings concern over the border opening sooner rather than later.

Hog futures slipped lower as well Thursday, trading around $2.60 lower for the first seven contract months. Cash prices have continued to slip and pork cutouts are down for four days in a row. The trend does not seem to be hogs' friend.

	BULL SIDE		BEAR SIDE
1)	The Cattle on Feed report will resume this month, giving the market fresh news that most likely has not improved since the last report. Numbers expected to still be low.	1)	The Commitments of Traders report will resume now that the government is open. Traders presume we have lost a lot of the managed fund longs in cattle.
2)	Fundamentals in cattle have not changed; we still have one of the smallest herds in nearby history and demand is still prevalent in stores. .	2)	The rollout of the screwworm plan between the U.S. and Mexico, as well as the announcement of the opening of a sterile fly dispersal facility in Tamico, Mexico, brings concern the border will open soon.
3)	Hogs are looking for a livestock complex rally for support.	3)	Pork cutoff prices have taken a big hit over the last four days. This is not a positive indication for what is to come.
4)	Technical trading as we approach July lows could bring some additional buying in hogs.	4)	Without positive news, hogs are struggling to find reason to support prices. They are dependent on a continued rally from cattle to find any positive ground.

For our next livestock update, please visit our Midday Livestock comments between 11 a.m. and noon CST. Also, stay tuned to our Quick Takes throughout the day for periodic updates on the futures markets.

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Join us for DTN's post-report webinar at 12:30 p.m. CST, on Friday, Nov. 14, as we discuss USDA's new estimates in light of recent market events. Questions are welcome and registrants will receive a replay link for viewing at their convenience. Register here for Friday's November WASDE report webinar: https://www.dtn.com/….

Robin Schmahl can be reached at rschmahl@agdairy.com

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