Morning Livestock Report, 10/01/2015

Thursday, October 01, 2015

The $118-121 Northern cash cattle business we'd seen on Tuesday was followed up with larger volumes at those levels again yesterday. I've also heard of some trade in KS at $124. All of this would be down sharply from last week's $128-130 market and down from $150 just eight weeks ago! Futures have reacted as poorly as possible, with nearby Oct LC futures trading down the limit for a second straight day yesterday. But with Oct still at $124+, Northern producers may still view physical delivery against futures as their best alternative for marketing. This threat has Oct futures speeding lower for convergence and the Oct-Dec spread very weak, trading all the way out to -$7.85 at one point yesterday. Beef prices remain under sharp pressure as well with the choice cutout at 18 month lows; beef 90s specifically were down 25 cents yesterday to $2.46/lb; beef 50s down to just $0.38, a multi-year low there. As the entire complex violently adjusts lower (beef, LC, FC, calves, cows, etc), there becomes a new topic we should all closely evaluate - counterparty risk.

Unless otherwise noted, the posts on this blog should be construed as market commentary, merely observing economic, political and/or market conditions, and not intended to refer to any particular trading strategy, promotional element or quality of service provided by INTL FCStone Inc. or its subsidiaries. INTL FCStone Inc. is not responsible for any trading decisions taken by persons viewing this material. Information contained herein was obtained from sources believed to be reliable, but is not guaranteed as to its accuracy. These materials represent the opinions and viewpoints of the author, and do not necessarily reflect the viewpoints and trading strategies employed by INTL FCStone Inc. or its subsidiaries. Reproduction without authorization is prohibited. All rights reserved.

Market Intelligence Free Trial