The supply situation remains a positive force but weak demand news and high weights remain an obstacle for the bulls. December cattle closed 50 higher on the session Friday and closed up 150 points for the week. The market traded lower early but the positive US employment news sparked higher trade in cattle and in the US stock market. This helped push cattle moderately higher on the day but the bounce fell short of Thursday's highs.
Cash cattle trade was higher last week which may have helped support the market but news of record high steer weights was seen as an offset. While slaughter was down 49,000 head for the week, the record weights helps to dilute the smaller feedlot supply. A tighter supply of cattle has helped to provide support for the cattle market but high weights could spark higher than expected beef production even if slaughter levels are lower.
Slaughter came in under trade expectations for the second day in a row at 115,000 head, which could suggest weak packer demand. This brought the total for last week to 620,000 head, down from 651,000 the previous week and down from 669,000 a year ago. Boxed beef cutout values were down $1.11 at mid-session Friday and closed $1.36 lower at $189.99. This was up from $188.98 the prior week.
The Commitments of Traders reports as of October 2nd showed non-commercial traders were net long 30,606 contracts, a decrease of 16,416 for the week and the long liquidation selling trend is seen as a short-term negative force. Non-commercial and nonreportable traders combined held a net long of 12,843 contracts, down 14,468.
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