DTN Before The Bell-Livestock

GENERAL COMMENTS

Trade is expected to remain sluggish through most of the morning in both cattle and hog futures. Traders are expected to be shifting from late Friday moves in anticipation of market corrections later in the week. Corn futures are trading lower in light early trade. Stock markets are mixed in light trade. Dow Jones is 16 points lower, while Nasdaq is up 7 points.

LIVE CATTLE:

Opening call: Mixed. Choppy early trade is likely to hold through most of the morning with traders trying to assess just how much additional longer-term direction will be seen before the Thanksgiving holiday break. Even though no significant market reaction is expected to be seen following the cattle on feed report after report numbers followed pre-report estimates, there could be some slight to moderate adjustments done through the morning. The light volume seen over the next couple of days in all commodity markets may be the biggest focus of the market. Cash cattle markets interest is expected to move back to a typical Monday of inactivity with show list distribution and inventory taking. Packers and feeders will likely desire to get business done before the Thanksgiving holiday, but given the last minute activity the last few weeks that seems rather unlikely. More information on last week's sales totals will be available through the morning. Open interest Friday added 2,143 positions (277,063). Spot December fell 3,295 positions (55,153) and February contracts added 2,561 positions (109,533). DTN projected slaughter for Monday is 110,000 head.

FEEDER CATTLE:

Opening call: Steady to 50 cents higher. Light follow-through buyer support is expected to slowly trickle back into the feeder cattle futures complex. The moderate pullback in placement levels in October is going to help to allow the market to keep a tight supply focus through early 2016, even though traders are uncertain about just how much additional buyer interest can be placed into retail markets at this point. Open interest Friday lost 613 positions (34,826). Cash index for 11/19 is 174.39, down 2.42.

LEAN HOGS:

Opening call: Mixed. Strong support seen late Friday is expected to create a combination of movement Monday morning as additional momentum is likely to develop through December contracts as traders see additional room for upward potential through the end of the month. But the strong $6 rally over the last week also is screaming for a market correction to take place before the holiday break as traders focus on light volume in the next couple trading days. 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 11/19 is 55.52, down 0.37. 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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