Morning Livestock Report, 01/04/2016

Monday, January 04, 2016

It seems fitting that the cattle markets finished out 2015, our most volatile year in recent history, with a real bang. Nearby Feb futures have rallied nearly $15 over the past two weeks, cash cattle $18, and the choice beef cutout more than $21. But is it sustainable now that we’re post-holiday and back to normal slaughter schedules? At least some of this move has been driven by weather and a cumulative effect on cattle that dates back to mid-November. This slowdown in cattle performance doesn’t get corrected quickly and now probably makes the market more sensitive to weather forecasts through the remainder of the season. Last week’s carcass data showed another decline in weights with the average carcass off 1 lb vs the prior week; steers and heifers each down 2 lbs. Weights remain record heavy, but are down a quick 15 lbs from the highs back in October, a larger than normal seasonal decline. This morning, outside markets look like the real story, with sharp losses in the equities probably testing the resolve of cattle bulls right out of the gate.

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