Morning Livestock Report, 12/01/2015

Tuesday, December 1, 2015

The cattle markets disappointed from the start yesterday, opening 20-80 points lower and trading as much as $1.80 lower by the end of the session in the fats and $3.00+ lower in the feeders. This weakness comes despite more widespread weather troubles, instead mirroring the disappointingly steady-money cash cattle trade that developed on Friday. Mandatory USDA recaps out yesterday showed the cash cattle trade came on larger trade volume than previously believed, with $127 trading 7,000+ head in KS, $126 trading in TX and NE, and $123 in IA. Even after yesterday’s weakness, nearby Dec futures sit at $130+, keeping deliveries in the picture for next week and we all remember the sharp futures plunge and spread weakness seen the last time deliveries loomed in early-October. Nearby Oct live cattle futures collapsed from $133.70 to $123.07 in the week prior to first notice day; the Oct-Dec spread traded from -3.30 to -8.30! The market looks to be attempting some degree of cash-futures convergence now and last week’s poor cash trade has prompted futures to do the majority of the work.

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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