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DTN Early Word Opening Livestock 10/15 06:21
Optimism Sparks Renewed Cattle Buying
Active support moving into the cattle complex during early week trade helped
to solidify previous week's gains. This is not only expected to spark
additional futures interest but stimulate feedlot expectations when it comes to
cash cattle trade.
By Rick Kment
DTN Livestock Analyst
Cattle: Steady Futures: Higher Live Equiv: $138.73 +0.75*
Hogs: Higher Futures: Mixed Lean Equiv: $ 82.71 +0.42**
* based on formula estimating live cattle equivalent of gross packer revenue
** based on formula estimating lean hog equivalent of gross packer revenue
GENERAL COMMENTS:
Cash cattle trade is expected to remain quiet early Tuesday with limited
packer interest likely until Wednesday or later. A few asking prices developed
late Monday in Nebraska at $115 live and $180 per cwt dressed, but cattle still
need to be priced through the South. It is likely that cash cattle trade will
be delayed until the end of the week, although the focus on futures gains is
whetting the appetite and creating expectations of another strong rally through
the end of the week. Futures trade is expected to remain generally higher early
Tuesday morning following the momentum shift higher the last couple of weeks
and strong triple-digit gains able to hold Monday. December futures closed at
$133.45 per cwt Monday afternoon, indicating a generally unchecked rally of $14
per cwt since hitting September lows. A move above $114.30 per cwt would break
through July resistance levels, sparking additional technical support through
the remainder of October. Although supply tightness is expected during early
2020, the concern that this pace of upward movement in the market may be
limited is expected to curb upward market support over the next couple of
weeks. Even though firm support is expected the next few months, the short term
moves in the market are not likely to follow the aggressive upward trend over
the last week. Tuesday slaughter runs are expected at 117,000 head.
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