Quietly Higher Futures; Solid Fundamentals

By Cassie Fish, http://cassandrafish.com

CME cattle futures are quietly higher as they continue their consistent, going-nowhere-fast choppy trading range. October LC expired Friday higher than any spot expiration since February 2019. But because futures are carrying premiums to cash and the basis is narrowing as cash strengthens, futures are content to chop. Most active December LC will feature pre-roll this week while the Goldman roll begins Friday and open interest will migrate to the February LC.

There was significant positive fundamental news last week first in the slaughter level, which totaled 668k head and included the best Monday through Friday throughput in ages. This week’s slaughter is estimated at 660k head, give or take.

Next, last week’s negotiated fed cattle trade totaled 104k head, the second highest total of 2021 and only 11k were bought with time. Reports of improved front-end clean up are noted in lots of spots. The average price last week topped $126 for the first time since April 2019.

Boxed beef values seasonally bottomed two weeks ago and are advancing. At the same time last week saw record beef production- a testament to record beef demand both domestic and globally. The choice/select spread bottomed last week seasonally as the choice rib makes it holiday run, also having bottomed two weeks ago. Packer margins continue at a record pace.

 

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.

  

Please follow and like us: