By Cassie Fish, http://cassandrafish.com

CME cattle futures have put in a solid, positive technical performance this week, complete with new highs for most months and contract highs for some and even beleaguered Dec LC back to its 100-day moving average. Someone demanded the deliveries against the Dec LC contract after they were retendered and that has supported Dec LC all day.

Today’s action, other than the strength in the Dec, is basically unchanged as the market awaits this afternoon’s USDA Cattle-on-Feed report. The average guesses for the report are COF 100, Placed 91, Marketed 98. If there is a surprise, it might be a smaller placement figure.

This drop in placements in November will add to the 270k drop in October placements. Talk is December placement are slow too, which means 90 days of much lighter placements than a year ago, bullish mid-Q2 onward.

Packers did not purchased many cattle last week at 57k head and thus far this week, have only totaled 54k head. The luxury of next week’s historically small kill has taken the pressure off cattle inventory needs. That will change as the kill the week after Christmas is likely to be more robust than usual.

Packers paid $108 yesterday in Texas and Kansas, which was steady with the prior week. The south has tighter market-ready fed cattle supplies than the north and $108 cash cattle price is the cheapest for December since 2010 when cutout prices were in the $160s not over $200.

This week’s slaughter is still estimated to be 660k to 665k compared to 666k a year ago. Boxed beef prices are bottoming.

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