Morning Livestock Report, 11/13/2015

Friday, November 13, 2015

The cattle markets were able to follow-through on Wednesday’s sharp rally, with live cattle trading $3+ higher by midday yesterday and closing $1.60-1.90 higher in the nearbys. We’ve yet to see any real cash cattle trade develop, with packers showing $131 bids vs $135+ producer offers. Historical average basis for this time of year has been between $0 and -$1, so nearby Dec futures at $133 would imply the market is pricing in a $132-133 trade. However, not all is well on the beef front, where the choice and select cutout indexes were smacked for $3-4 yesterday and are off $8-9 in this past week. Beef weakness of that size was not expected and probably sets the stage for futures to start lower this morning. Note week ending Oct 31 slaughter data released yesterday show the average carcass down 5 lbs vs the prior week (steers down 7; heifers down 1). Though the average carcass remains a sharp 18 lbs above last year, its likely we have now hit our seasonal peak with weights trending sideways through the end of the year and seasonally lower in to the spring.

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