The jump in beef prices over the past few sessions is a step in the right direction to help alleviate poor margins for the packer. The market will need to see higher beef trade or lower cash markets ahead to mend margins. The tightening supply ahead remains as a key supportive force.
December cattle closed higher on the session yesterday and near the middle of the range. A jump in beef prices and ideas that the market was too oversold on the break last week helped to support and a surge in hogs added to the positive tone. The market saw solid gains early but mixed news for the cash market outlook helped to limit the advance. Showlist supply this week looks smaller for most areas but higher in Nebraska.
Talk of sluggish export demand also helped to limit the advance. A large beef recall in Canada due to e-coli might have helped to support the bounce.
Slaughter came in a below trade expectations at 125,000 head. This can sometimes indicate sluggish demand from the packer. This brings the total for the week so far to 251,000 head, down from 256,000 last week at this time and down from 263,000 a year ago.
Boxed beef cutout values were up $1.70 at mid-session yesterday and closed $1.30 higher at $190.49. This was down from $192.68 the prior week.
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