With more deliveries and a move down in beef prices to an 11-day low, the market looks vulnerable to a continued set-back with October trading at a stiff premium to last week's cash. There were 10 new deliveries and 25 retenders posted late Friday, which might help pressure today. Outside markets carry a positive tilt.
October cattle closed moderately lower on the session Friday but managed to stay inside of Thursday's range. New deliveries, lower than expected cash cattle trade last week and fears that production could come in above trade expectations in the weeks ahead, if there is extra cow and non-fed cattle slaughter, helped to pressure.
Nebraska cattle traded $119-$120 last week with Texas at $120-$121, and this leaves October holding a premium even with the outlook for increasing total meat production in the weeks just ahead. October cattle closed 122 lower for the week while June cattle managed to close higher for the week.
Boxed beef cutout values were down 18 cents at mid-session Friday and closed $1.69 lower at $192.14. This was down from $193.03 the prior week and is the lowest beef market since August 16th.
The estimated cattle slaughter came in at 124,000 head Friday and 20,000 head for Saturday. Weekly slaughter came in at 653,000 head, which was up 10,000 from last week but down 25,000 head from last year.
The Commitments of Traders reports as of August 21st showed non-commercial traders were net long 46,481 contracts, an increase of 6,315 for the week and the buying trend is normally seen as a supportive force. Commodity Index traders held a net long of 119,175 contracts, down 1,084 for the week.
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