With record high weights and a premium of futures to the cash, it will take a stronger beef market to provide incentive for buyers to get more active. After a strong stopper took deliveries on Tuesday, there were no deliveries yesterday and none overnight which helped to support a run to the highest level since September 24th for October cattle and this may help support higher trade for December cattle early today.
The outlook for tightening supply of cattle moving off of feedlots for November and December has helped to provide underlying support. December cattle closed slightly lower on the session yesterday with quiet trade. After trading $124.00 last week, cash cattle in the central and southern plains were bid at $122.00 with offers at $126.00. The market saw choppy and two sided trade early in the session and found some support from higher pork values and from a recent stronger tone for beef prices.
Talk that cash could trade $1.00 higher this week and a lack of new deliveries helped to support. However, the market failed to attract new buying interest on a test of Tuesday's highs and the market set-back to trade slightly lower on the day into the close. The lower stock market action and continued fears of consumer resistance to higher beef prices helped to pressure.
Slaughter came in higher than expected at 127,000 head which might suggest better demand from the packer. This brings the total for the week so far to 382,000 head, up from 372,000 last week at this time but down from 386,000 a year ago.
Boxed beef cutout values were down 4 cents at mid-session yesterday and closed 22 cents lower at $190.98. This was up slightly from $190.70 the prior week.
*Disclaimer: The information in the Market Commentaries was obtained from sources believed to be reliable, but we do not guarantee its accuracy. Neither the information nor any opinion expressed therein constitutes a solicitation of the purchase or sale of any futures or options contracts.
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