Morning Livestock Report, 09/21/2015

Monday, September 21, 2015

Adam Stout

Live and feeder cattle futures traded to fresh contract lows yet again on Friday, closing with general $4-5 week-to-week losses in the fats and $8-10(!) losses in the feeders. Friday afternoon's COF report, however, should lend a supportive hand this morning as Aug placements were shown at just 94.6% of a year ago, a new all-time low, and a full 6% below the average trade guess. This resulted in an on feed total at 102.7% of last year, below the low end of the estimated range. Aug marketings were as expected. But regardless of the placement total, the industry must still work through very heavy front-end supplies, which has forced our cash market lower for six consecutive weeks and buried feedyard closeouts deep in the red to the benefit of packer, and to a lesser extent retailer, margins. Packers did push through a 576K head slaughter total last week, a multi-month high, and larger than most had anticipated. This will help clean up the problematic cash cattle market, but also likely press the beef market lower-yet this week where the choice cutout was down $10 last week, $4.20 on Friday alone.

Unless otherwise noted, the posts on this blog should be construed as market commentary, merely observing economic, political and/or market conditions, and not intended to refer to any particular trading strategy, promotional element or quality of service provided by INTL FCStone Inc. or its subsidiaries. INTL FCStone Inc. is not responsible for any trading decisions taken by persons viewing this material. Information contained herein was obtained from sources believed to be reliable, but is not guaranteed as to its accuracy. These materials represent the opinions and viewpoints of the author, and do not necessarily reflect the viewpoints and trading strategies employed by INTL FCStone Inc. or its subsidiaries. Reproduction without authorization is prohibited. All rights reserved.

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