By Cassie Fish, http://cassandrafish.com
After a big two day correction in live cattle futures, the market has rallied back with a vengeance. Open interest dropped about 11k contracts on the break and perhaps that was enough. The correction took care of the overbought technical posture
Spot October LC has charged to new all-time highs today. The rest of the contracts thus far not trading above Monday’s high or last week’s highs, which is when contract highs were established. Feeder cattle futures are keeping pace with the live cattle futures rally but are way off of their highs made September 15. As the long-term rally grows with age, volatility increases.
There is finally some good news in the wholesale beef market. The rib, a key player in every Q4 rally, caught fire yesterday and beef 50s, which have been under significant pressure for all of September are showing signs of a bottom. Choice boxes printed higher yesterday and again this morning, now back up to $301.48 after dropping under $300 earlier this week for the first time since May.
The negotiated fed cattle market trade volume totals 51k head this morning, prices generally steady to maybe a touch softer in spots with last week. Packers are demonstrating their interest in keeping inventory around them heading into Q4.
This week’s harvest is expected to be smaller than last week’s 625k as a few plants are dark tomorrow and Saturday’s slaughter is very small. Packers are still struggling with margins.
The USDA released actual carcass data this morning and steer weights increased 2 pounds to 919 pounds, up 2 pounds from a week ago and up 1 pound from a year ago. There are two years that had higher weights than 919 for this week, 2020 at 920 pounds and 2015 at 923 pounds. Weights don’t seasonally top until November or even early December.
Copyright © 2023 the Beef Read. All rights reserved
The Beef is published by Consolidated Beef Producers
Use of part or all of this blog for any reason without permission is strictly prohibited.
Disclaimer: The Beef, CBP, Cassie Fish nor NFC Frontier Capital Markets shall not be liable for decisions or actions taken based on the data/information/opinions.
This material has been prepared by a sales or trading employee or agent of New Frontier Capital Markets and is, or is in the nature of, a solicitation. This material is not a research report prepared by New Frontier Capital Markets. By accepting this communication, you agree that you are an experienced user of the futures markets, capable of making independent trading decisions, and agree that you are not, and will not, rely solely on this communication in making trading decisions. DISTRIBUTION IN SOME JURISDICTIONS MAY BE PROHIBITED OR RESTRICTED BY LAW. PERSONS IN POSSESSION OF THIS COMMUNICATION INDIRECTLY SHOULD INFORM THEMSELVES ABOUT AND OBSERVE ANY SUCH PROHIBITION OR RESTRICTIONS. TO THE EXTENT THAT YOU HAVE RECEIVED THIS COMMUNICATION INDIRECTLY AND SOLICITATIONS ARE PROHIBITED IN YOUR JURISDICTION WITHOUT REGISTRATION, THE MARKET COMMENTARY IN THIS COMMUNICATION SHOULD NOT BE CONSIDERED A SOLICITATION. The risk of loss in trading futures and/or options is substantial and each investor and/or trader must consider whether this is a suitable investment. Past performance, whether actual or indicated by simulated historical tests of strategies, is not indicative of future results. Trading advice is based on information taken from trades and statistical services and other sources that New Frontier Capital Markets believes are reliable. We do not guarantee that such information is accurate or complete and it should not be relied upon as such. Trading advice reflects our good faith judgment at a specific time and is subject to change without notice. There is no guarantee that the advice we give will result in profitable trades.