Morning Livestock Report, 10/16/2015

Friday, October 16, 2015

The cattle markets opened near unchanged, before spending most of the session trading weaker yesterday as the market awaits confirmation of a higher cash cattle trade. The boxed beef markets remain firmer and estimated spot packer margins are still well in the black, but we've yet to see any real cash cattle interest develop from them yet this week. The packer bids we've seen are still $10 below producer offers and $8 below nearby Oct futures. Average historical cash cattle basis for this week is very near +$0. I see another 8 deliveries posted last night, with some producers still obviously worried about weaker than normal basis. Week ending Oct 3 slaughter data out yesterday showed steer carcass weights up 4 lbs and heifers up 8 lbs vs the prior week, both at new record highs. Also interesting to see cow slaughter now starting to tick higher at a quicker than normal pace....eroding production economics and drying conditions across the south perhaps both playing a role there?? YTD beef cow slaughter is down 15% vs last year, but the past three weeks have been unchanged.

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