Livestock –
Early releases of expectations for Friday’s COF report are leaning bearish at this point. Most estimates for placements I’ve seen suggest they could be 6-12% higher YOY.
Beef prices were weaker last week but remain pretty firm overall. Obviously we saw weaker than expected cash trade last week, with some estimates of the weighted average price near 127. This adds up to some especially rosy packer margin estimates, which means the recent kill rates really shouldn’t slow down as long as they’re making this much money. We heard rumors that one or maybe two packers were completely out of the market late last week, refusing to offer on cattle. I can’t confirm if this is true or not, but with these sorts of spot packer margins (on paper) you’d have to think they’re not very constructive on future beef demand if they’re sitting out the market. Look for this week’s cattle showlist to be larger than last week as volume was less than impressive overall (perhaps lending support to rumor of packers being out of the market?).
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