December cattle seem to be consolidating near last week's cash trade at $127.00 as traders await direction from the cash market. Boxed beef cutout values were up 88 cents at mid-session yesterday and closed 86 cents higher at $199.38. This was up from $195.71 the prior week and beef is at the highest level since October 20th of 2003 when beef prices closed at $200.65.
December cattle closed just 22 higher on the session yesterday as strong beef prices were offset by demand concerns from consumers and uncertainties on cash trade direction this week. The upside was limited by talk that cash bids emerged at just $124.00 as compared with offers at $128.00 and compared with last week's trade at $127.00. In addition, there are concerns that packer margins are still in the red. There were no deliveries overnight.
Slaughter came in well below trade expectations at 114,000 head yesterday. This brings the total for the week so far to 366,000 head, down from 376,000 last week at this time and down from 388,000 a year ago and lower than expected slaughter can sometimes mean weak demand from the packer. However, tightening supply ahead and strong beef are seen as positive forces.
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