The cattle complex traded softer for most of the session on Friday and finished lower for the week as well, despite the limit higher move on Wednesday. Live cattle futures posted mostly $1-2 losses on the week, with feeders down $2-3 in what looks like some consolidation action, albeit in a $5 trading range! Weekly slaughter totaled 553K head, down slightly from the 556K of the prior week, and up slightly from last year's 554K. But with carcass weights running almost 4% larger than a year ago, total beef production in this past month is consistently outpacing prior year levels, a stat we haven't been able to report in quite some time. Similar to futures, the beef market also looks like it has stalled, or at least slowed its ascent. Seasonally, we should start seeing middle meat values support the cutout into the holidays and, with estimated spot packer margins back toward breakeven, I think we'll need this beef strength to develop in order to sustain additional upside in the cash cattle and futures markets.
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.