DTN Before The Bell-Livestock

Light Support Expected Early Monday

Rick Kment
By  Rick Kment , DTN Analyst
(DTN photo by Nick Scalise)
GENERAL COMMENTS

Early buyer support is expected to slowly develop Monday morning on both cattle and lean hog futures. But these gains may be quickly eroded through the morning as concerns that end-of-month position-taking may create additional volatility and shift price direction through the day. Market volatility may continue to develop as the day continues. Corn futures are trading higher in light early trade. Stock markets are lower in light trade. Dow Jones is 31 points lower, while Nasdaq is down 5 points.

LIVE CATTLE:

Opening call: 20 to 80 cents higher. Moderate initial price gains are likely to develop through the live cattle trade early Monday morning, although there are some significant questions about just how strongly the end of the month support will be able to hold market support through the end of the day. Cash cattle activity will be interesting to define following the lack of movement and interest shown last week. Show lists are expected to be large given the lack of movement last week, and packers are expected to be short bought once again. But it will be interesting just how aggressive packers will be going into the first of the month. Open interest Friday lost 427 positions (279,612). Spot December fell 1,726 positions (45,910) and February contracts added 1,978 positions (114,447). DTN projected slaughter for Monday is 98,000 head.

FEEDER CATTLE:

Opening call: 20 to 60 cents higher. Light buyer activity is likely to slowly trickle into the feeder cattle market early Monday morning, but any trade may be cautious given the lack of cash market direction seen last week. There will be a lot of focus given to the direction of both live cattle markets and outside market movement through most of the morning which could quickly direct trade activity through the rest of the day. Open interest Friday added 59 positions (33,660). Cash index for 11/26 is 172.16 unchanged.

LEAN HOGS:

Opening call: Steady to 50 cents higher. Light early-week buyer support is expected to step into the market Monday morning as traders focus on end-of-month position-taking. Volume is expected to be increased following the weekend activity with the light pressure seen Friday due to lack of post-holiday market pressure due to soft trade interest. Traders could continue to focus the development of steady to firm cash markets as well as interest in pork values through leading into the Christmas holiday which may help to spark additional demand support. Cash bids are steady. Open interest Friday fell 601 positions (200,618) Spot month December fell 629 positions (31,198) and February lost 230 positions (89,829). Cash lean index for 11/25 is 55.74, up 0.10. DTN projected slaughter numbers for Wednesday are 435,000 head, with Saturday's run expected to be around 376,000 head.

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

P[L1] D[0x0] M[300x250] OOP[F] ADUNIT[] T[]
P[L2] D[728x90] M[320x50] OOP[F] ADUNIT[] T[]
P[R1] D[300x250] M[300x250] OOP[F] ADUNIT[] T[]
P[R2] D[300x250] M[320x50] OOP[F] ADUNIT[] T[]
DIM[1x3] LBL[] SEL[] IDX[] TMPL[standalone] T[]
P[R3] D[300x250] M[0x0] OOP[F] ADUNIT[] T[]

Rick Kment