Morning Livestock Report, 11/02/2015

Monday, November 2, 2015

The cattle complex traded softer for most of the session on Friday and finished lower for the week as well, despite the limit higher move on Wednesday. Live cattle futures posted mostly $1-2 losses on the week, with feeders down $2-3 in what looks like some consolidation action, albeit in a $5 trading range! Weekly slaughter totaled 553K head, down slightly from the 556K of the prior week, and up slightly from last year's 554K. But with carcass weights running almost 4% larger than a year ago, total beef production in this past month is consistently outpacing prior year levels, a stat we haven't been able to report in quite some time. Similar to futures, the beef market also looks like it has stalled, or at least slowed its ascent. Seasonally, we should start seeing middle meat values support the cutout into the holidays and, with estimated spot packer margins back toward breakeven, I think we'll need this beef strength to develop in order to sustain additional upside in the cash cattle and futures markets.

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