Morning Livestock Report, 12/22/2015

Tuesday, December 22, 2015

The cattle markets sat at limit higher for most of the session yesterday, before fading through the afternoon hours. Most active Feb futures came off those limit highs by $0.85 and Jan feeders by $1.00, after a sharply lower print in the afternoon boxed beef markets. Feeder cattle futures were also pulled by a quick $4.46 break in the feeder cattle index, which now sits at a $5+ discount to nearby futures. The choice beef cutout was off a sharp $2.86 and to fresh 28 month lows, following last week’s 590,000 head slaughter total, our largest in more than a year. Where’s demand? And when does retail featuring begin to show consumers the much lower wholesale prices?? This afternoon’s Cold Storage report is again expected to show record large beef stocks in freezers, a function of the expanding production, big imports, and reduced movement into consumer channels. There were five new deliveries tendered at Dodge City last night, our first delivery interest in a week. Expanded limits remain in place today, but I doubt we’ll need them with futures expected to open softer.

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