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Ridgway, IL | Were there more cattle moving from drought stricken areas in july than there were in june? maybe a stupid question, but thats too far from my geography.
i think we can expect marketings to be up. But i wonder if placements wont be tempered a little bit??? Forward margins have been very poor, it sure hasnt looked like the situation you would expect if ranchers were puking feeding stock during a time when feedlot occupancy is higher than it has been in a couple years.
Isnt it crazy how strong the support levels of 105 LC and 140 FC are?? That 140 has held this market since april. I feel like that will be like the levee breaking if we punch through.
The cutout is finding no love. Down again today to 1.956, which is a 22% decline from summer high. Last years break in the cutout was 21% from spring to fall low. The cutout is now below this time last year. The cutout got much higher this spring than last year. The choice select spread is now 1.43, that has to be as low as its been in recent history... much lower than last year and the 5 year avg.
Packer margins are good, but not exorbitant. 175 dressed vs 195 cutout, i think the drop credit is around 10 bucks. That spread has been much more favorable for the packer several times during the past couple months... with packing capacity utilization, presumably at higher levels now than it has been for many months... i have to assume the packer is going to do what they need to do to make more money... i.e. buy cattle cheaper.
There was good volume of negotiated trade today, the packer was said to have been operating from a position of strength after buying a lot of cattle last week... does todays volume give them ability to sit out of the market for a week if they cant get the cattle bought cheaper?
Personally, i wouldnt be surprised if COF report tomorrow isnt as bearish as last month... but i believe there are already plenty of cattle due to come fat the next 75 days that there isnt much turning back from the direction we are currently heading. We need to get tonnage off the market by decreasing the price received or increasing the cost of production.
Edit -- I thought the same thing as NTEX and looked up the report date from last month and seen it was released the 21st, i just presumed it was coming early this month lol. Next week works better anyway
Edited by LKM 8/17/2017 18:17
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Cash Cattle
