After trading $1+ lower early in the session, the cattle market was jazzed midday yesterday with news of some light $126 cash cattle trade reported in IA. I hear these cattle may even be shipping to the packer later this week, perhaps suggesting packers are short-bought after a couple weeks of small volume purchases in the negotiated market?? That $126 trade would be up a solid $3 vs the trade there last week, but still $6 BELOW where Dec futures settled yesterday afternoon and anything but the cash-futures convergence the industry would like to see this week. Do note that forward feeding margins (crush spreads) continue to improve, some by $130 per head since early August, and imply better things for feeding margins this next year. Of course this isn’t helping the problem with existing on feed inventories and current closeouts where $300-500/head losses are commonplace and I hear some horror stories that are worse than that. The Livestock Marketing Info Center says 2015 is likely to be the worst ever for cattle feeding profitability.
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