By Cassie Fish, http://cassandrafish.com
Slowly but surely, CME cattle futures have gained some upward momentum today, finally pushing above short term moving averages. At the same time, bids surfaced in the south at $177, $1 lower than last week, and a few have traded that way. A $280 bid has been noted in eastern Nebraska and passed and $176 in western Nebraska is being passed. Spot December LC has taken out yesterday’s high and is exhibiting some leadership. Futures are oversold.
Next week tends to be the largest slaughter week until the new year, and packers have two consecutive weeks of light buys behind them. This means packers need to replenish fed cattle inventories for next week and paying at least steady is likely required. Packer margins are still a bit red and the packer is doing his best to keep them worsening. A 640k head slaughter next week is possible.
Boxed beef values have been uninspired this week with some cuts strong and others weak, leaving the net result about a wash on the choice. This morning the choice cutout printed up $1.17 at $296.98 while the choice/select spread widened to $29.99.
The CME is closed tomorrow and has a shortened trading session on Friday.
Happy Thanksgiving to all of our readers in the U.S.. We appreciate your readership over these many years.
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