Written Commentary
Livestock Outlook
Nothing unusual in the Cattle on Feed Report but placements were 3 percent above average trade estimate but not out of range of high estimates. The report is negative because of placements.
With wide spreads, over the past couple of weeks there has been active forward contracting. Up to the past couple of weeks since cattle prices dumped last spring feedlots haven’t been eager to sell far ahead, but with unusually wide spreads, they took advantage of what futures offered and packers booked cattle into 2021. However, last week packers were trying to price ahead cattle into the second week of October and feedlots were not taking bids and only selling for this week’s delivery.
For a day after a Hogs and Pigs Report traders seemed to forget it took place. At 1:00PM when livestock futures settled, volume was only 16,400 contracts on the December Lean Hog contract. That few of contracts is a slow day any time but after a quarterly report, you could say it was a dead day. Trading was some spreading but hardly any of it. Trade on light volume was more about the active cash market and moving October closer to the index.
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