Softer

By Cassie Fish, http://cassandrafish.com

The tone for this week’s boxed beef and cash cattle trade are the same- continued erosion. In the north this morning only one major has bid $153 dressed on limited head count which is the at the low end of range of cattle traded on Friday. The remainder of the packers are not bidding on Monday of this holiday week.

Thanks to a Saturday holiday though this week’s slaughter schedule will be mostly a 5-day kill week and the total could reach 600k head, which would be 22k above a year ago. Last week’s full kill was higher than expected at 680k though a downward revision won’t surprise.

The larger production is very welcome by end users who continue to refill the pipeline and increase offerings to consumers. Ends and grinds are reaching a level of support while middles will continue to decline into July, though not as swiftly as has been the case. The cutout is trading at the lowest level for any June since 2013. Hopefully, this will result in an increase in beef features soon. Out-front bookings have picked up in the last couple of weeks.

CME cattle futures continue to trade light volume with little change in open interest from day to day. The most recent Commitment of Trader’s report released by the CFTC showed very little of interest, the various participants offsetting one another’s limited activity.

Today’s action shows a little changed Jun LC, that will expire tomorrow at noon while the rest of the contract months trade defensively in the same trading range that has worn on for many weeks.

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