Livestock –
The COF report was pretty uninspiring, coming in pretty close to expectations. With that in mind, early opening calls are probably nothing special. That said, I think the market was fearing a more bearish report and the basis remains very wide. Combine that with a still-tight spot cash market and I think we’ve got the ingredients for some upside this week in LC futures.
Still, the heavy placements will keep all eyes on summer cattle supplies. Don’t be surprised if the spreads grow wider in the near future as the market tries to balance nearby tightness with the “more later” implied in recent COF reports.
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