DTN Before The Bell-Livestock

GENERAL COMMENTS

Firm buyer support is developing through the morning with light trade seen through both cattle and hog markets Wednesday. There is expected to be some additional interest seen through the complex, although prices may remain in a narrow to moderate range through most of the day. Corn futures are trading higher in light early trade. Stock markets are higher in light trade. Dow Jones is 19 points higher, while Nasdaq is up 5 points.

LIVE CATTLE:

Opening call: 40 to 60 cents higher. Firm buyer support has stepped back into the live cattle complex early Wednesday morning as traders focus on the ability to regain ground lost in the late day pullback Tuesday. This week of light trade due to holiday market activity has been more about position taking than anything else in the cattle market, as prices have gyrated back and forth in a moderate range. As the Thanksgiving holiday grows close, trade volume become even lighter, with traders becoming more sparse allowing for light buyer support to tickle into the market Wednesday morning. Cash cattle markets are still quiet although interest is expected to increase as the day develops as both sides are expected to try to get business done before they leave for the day, this way they will not have to return following the Thanksgiving holiday and finish Friday with a full plate of cash cattle business needing to be done. Open interest Tuesday added 1,196 positions (278,853). Spot December fell 1,956 positions (49,548) and February contracts added 1,978 positions (114,447). DTN projected slaughter for Wednesday is 111,000 head.

FEEDER CATTLE:

Opening call: 20 to 40 cents higher. Firm buyer support is slowly developing in the feeder cattle market as traders are moving into holiday mode and preparing positions for the market holiday Thursday. Trade volume is expected to remain sluggish through the rest of the week, although the light volume may allow for market prices to shift through the day given the opportunity for some additional position taking to be done. Increased focus will be given to the development of cash market direction through the end of the week. Open interest Tuesday added 350 positions (33,660). Cash index for 11/23 is 171.83 up 23.

LEAN HOGS:

Opening call: Steady to 50 cents higher. Firm buyer support is slowly stepping back into the lean hog futures market following early week pressure across the lean hog complex. The firm fundamental support in front of the holiday market is helping to create some additional support across the complex as December contracts are expanding the rally from recent seasonal lows. There is expected to be light trade volume through the rest of the week, which could allow for prices to moderate between $57 and $59 per cwt in nearby contracts. Cash bids are Steady to 50 cents lower with most bids steady. Open interest Tuesday added 623 positions (203,913) Spot month December fell 1,651 positions (33,205) and February added 1,475 positions (91,456). Cash lean index for 11/23 is 55.50, up 0.13. 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

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