More of the Same

By Cassie Fish, http://cassandrafish.com

Aug and Oct live cattle futures made new lows again today, though the extreme see-saw action has left many at a loss. Is the market bottoming, rejecting the sub-$105 level in Oct LC? Or is the market merely biding its time before it careens lower to the $100 level?

More cash cattle trade has occurred today at the $105 live, $166 dressed price points, steady with yesterday. Trade volume for the week has been light and packers are advertising that plants are full well into September, creating additional marketplace anxiety. Some cattle will likely be carried over into next week.

Boxed beef values have steadied out this week and the choice/select tightened up to close to even money. Beef exports, reported this morning were fantastic, scoring a new high for the year, but then good demand news is not new news.

Futures are exhibiting a split personality. Aug LC expired at the lowest level of any spot cattle contract since Oct LC 2016. Outside days have been posted all over the map, yet some contract months are trading higher, while others, basically Oct LC, look awful. Fall feeders don’t look all that bad while 2018 feeder contracts look potentially played out.

Next week will be the first in September, the beginning of a couple of weeks of longs rolling out of Oct and into Dec and Feb. Dec is already almost $4 over Oct and current cash prices, as the premiums in the deferreds continue to grow.

It’s only Thursday but feels like Friday as traders anticipate the long, holiday weekend, ready to get this week of wild price swings behind it.

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