February cattle pushed moderately lower on the session early, but recovered enough of those losses to close only slightly lower for the day. The recent negative tone of commodity markets, as well as the stiff premium of futures to the cash market, are widely seen as potentially negative forces. April cattle was also lower early, but closed slightly higher on the session. Strong economic from China this week have sparked widespread concerns that the Chinese may tighten their monetary policy in order to fight inflation. The market continues to see higher than expected production levels and higher than normal weights. While the supply flow has been considered normal, some traders feel that demand levels remain impressive with very strong beef prices for this time of the year. The estimated cattle slaughter came in at 126,000 head yesterday. This brings the total for the week so far to 501,000 head, up from 489,000 head last week at this time but down from 513,000 head a year ago. Boxed beef cutout values were up 95 cents at mid-session yesterday and closed 90 cents higher at $172.81. This was up from $169.00 the prior week and is the highest beef market since July 11th, 2008. Average dressed steer weights for the week ending January 8th came in at 852 pounds, down from 856 pounds the previous week but still up from 841 pounds a year ago. Beef production for the same week came in at 499.1 million pounds, down 0.36% over a year ago. For the Cattle-on-Feed report for this afternoon, many traders see December placements coming in at 10%-15% above last year, which could lift on-feed supply as of January 1st to near 4% above last year. Marketings are expected to be up near 5% from last year, and placements are projected to be above last year's levels for the 5th month in a row.
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