DTN Before The Bell-Livestock

Light Gains Seen in Live Cattle Futures

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

Live cattle trade is holding moderate gains in sluggish trade. The focus on late day cash cattle market development could help to draw additional market activity back into the complex helping to spark increased widespread market movements. Hog futures are holding strong early gains based on firm pork values. Corn futures are trading higher in light early trade. Stock markets are higher in light trade. Dow Jones is 155 points higher, while Nasdaq is up 29 points.

LIVE CATTLE:

Opening call: Steady to 50 cents higher. Narrow gains are holding in live cattle futures early Friday morning as traders are taking a cautious approach to the market through the first hour after markets opened. But the focus continues to be split between the movement in cash markets and the cattle on feed report results each will happen later in the day. Futures prices are expected to wander within a moderate range although light volume is expected to be seen through most of the morning. Cash cattle markets are still undeveloped Friday morning although there is still a few bids starting to develop in central Nebraska early Friday. Asking prices are redeveloping in the South at $131. Active trade could easily be delayed until after cattle on feed reports are released at 2 pm. Open interest Thursday added 2,266 positions (274,943). Spot December fell 3,290 positions (58,452) and February contracts added 3,846 positions (106,693). DTN projected slaughter for Thursday is 109,000 head.

FEEDER CATTLE:

Opening call: Steady to $1 Higher. Front month feeder cattle futures have posted strong triple digit gains early Friday morning, although there is some uncertainty as to just how much additional buyer support will be seen later in the day. There will also be some midday pre report positioning in front of the cattle on feed report which could keep trader shifting higher and lower through much of the session. Open interest Thursday gained 171 positions (35,440). Cash index for 11/18 is 176.77, down 0.95.

LEAN HOGS:

Opening call: $1 to $1.50 Higher. Firm follow through buyer support is seen in nearby lean hog futures as traders are quickly stepping back into the complex late in the week securing additional momentum in front of the weekend break. Armed with firming pork values and slight cash market support late Thursday, buyers seem confident that increased price support may continue to draw additional buyer interest into nearby lean hog futures. Cash bids are steady to 50 cents lower with most bids steady. Open interest Thursday added 169 positions (203,889). Spot month December fell 2,877 positions (38,575) and February added 1774 positions (89,004). Cash lean index for 11/18 is 55.87, down 0.17. DTN projected slaughter numbers for Friday are 430,000 head, with Saturday's run expected to be around 209,000 head.

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

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Rick Kment