By Cassie Fish, http://cassandrafish.com
Given last week’s solid slaughter at 657k head and another good, negotiated cash cattle trade volume, there is optimism cash prices will trade higher this week. Last week’s volume totaled 85k head, 77k in the 1-14 day delivery window as cattle sold with time decline. This week’s slaughter is estimated between 640k and 650k head as a couple of plants clean coolers.
At the same time boxed beef values continue to correct, the over-valued middle meats taking the big and much-needed hit while grinding material continues to be in strong demand. Choice posted at $283 this morning compared to the summer low of $264.
CME cattle futures are digesting this information with a very quiet, choppy trade. There was some good news to be found in last Friday’s close, as spot October LC posted the highest weekly spot close of any cattle contract since January 2020. So even though it doesn’t ‘feel’ like it the market has found a way to retrace the 2020 enormous decline. It’s just taken a long time.
Another factor limiting cattle futures is cattle contracts are not finding fund long participation. As of Friday, OI sank to the lows of 2021, unusual for October. The last Commitment of Traders report showed funds very modestly increased shorts as of last Tuesday. But Friday’s daily report, with sinking OI tells a story that funds may have blown a few shorts but aren’t showing any interest in the long side after being burned on the false break out in August.
Copyright © 2021 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.