Morning Livestock Report, 10/20/2015

Tuesday, October 20, 2015

Cattle futures gapped higher yesterday morning and stayed solidly higher throughout the session, following through on the impressive $136+ cash cattle trade on Friday. Boxed beef values also holding a firmer tone, up almost $2 in the choice cutout index yesterday, despite a hefty production total last week. Weekly slaughter noted yesterday of 576K head was actually revised lower to 573K head, but with record heavy carcass weights, total beef production was actually larger than the same week in each 2013 and 2014! It's been a LONG time since we could say that. Interesting to see weekly CFTC data out Friday show the "managed money" category as a net seller of 9,000 contracts in the week ending 10/13....during which time Oct futures rallied $7. They now hold a net long position of just 1,200 contracts, essentially nothing, and their smallest position since early 2013 when they went net short for one week. Most in the industry agree there's probably not much more spec selling to be had, and some traders dream about potential upside should spec funds begin re-building long positions....

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