DTN Early Word Opening Livestock 10/07 06:11

DTN Early Word Opening Livestock 10/07 06:11 Traders Enter Week Cautious of Upcoming Trade Talks With the planned trade talks with China expected to take place through the week, traders enter the week with cautious optimism. This is primarily directed at the lean hog and pork complex, but will quickly carry over to cattle trade as the week progresses. By Rick Kment DTN Livestock Analyst Cattle: Steady Futures: Mixed Live Equiv: $136.18 -0.11* Hogs: Steady Futures: Mixed Lean Equiv: $ 79.90 -0.20** * based on formula estimating live cattle equivalent of gross packer revenue ** based on formula estimating lean hog equivalent of gross packer revenue GENERAL COMMENTS: Following strong price support through the last half of the week in all areas of cattle country, the focus Monday morning is expected to move to showlist distribution and inventory taking. Trade developed in the North at $170 per cwt Friday, a $5 per cwt rally from the previous week. Additional trade cash activity set at $107 per cwt live basis in the South is $3 to $4 per cwt above last week's price levels and elevated from early week trade of $105 per cwt in the area. Futures are expected mixed in light-to-moderate trade Monday morning. The light price pullback seen on Friday is causing some additional uncertainty as traders remain cautious given the fact that December contracts have rallied $11.60 per cwt over the September low without a sizable market correction. This in itself could leave the live cattle futures complex vulnerable early in the week for a light-to-moderate shift lower. The strong upward move in cash cattle trade over the last couple of weeks is helping to rebuild fundamental support through the entire complex, but traders are going to need to see reduced market-ready cattle on showlist over the next couple of weeks in order to sustain the expectation and current optimism that overall supplies are starting to tighten. Monday slaughter runs are expected at 116,000 head.