Morning Livestock Report, 10/12/2015

Monday, October 12, 2015

Despite the slightly weaker finish on Friday, nearby October live cattle futures finished the week with sharp $7.70 gains, rebounding from the near $11 losses the prior week. Feeder cattle futures were up $9-10+. We did finally see some light cash cattle trade develop in the South late on Friday afternoon at what looks like mostly $127, up sharply from the $120 market of the prior week. But this is still a near $4 discount to Oct futures which will continue to leave traders questioning whether last week's futures surge was necessary or not. Boxed beef values are also struggling along, with the choice and select cutout indexes down roughly $3 last week and to fresh lows. Weekly slaughter totaled 557K head, down from the 570K+ levels of the prior three weeks. Much weaker wholesale beef prices should encourage some hefty retail featuring, though the lag time to weaker retail pricing can be significant with some analysts expecting another six weeks and others six months. Futures are expected firmer again this morning, but can it hold?

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