The cattle market traded sharply lower yesterday in response to lower cash market news, which was seen as increasing the possibility of large deliveries against the February contract. A set-back in beef prices late yesterday and news that Nebraska cattle were trading at $104.00 was not seen as enough of a negative factor for the market to move further lower during overnight trading. Many traders feel that the cash market will continue to move higher, as futures hold a much higher than normal premium to the cash market. A strong trend for beef prices and their move towards the highest levels since the summer of 2008 was not felt to be a positive factor for the market, until the initial selling eased up and beef prices recovered at mid-day. With a large premium to the cash, many traders were disappointed to see cash cattle in Texas trade at $105.00 this week. Weekly export sales for beef came in at 16,100 tonnes as compared with the prior 4-week average of 15,433 tonnes. Cumulative sales for 2011 have reached 126,100 metric tonnes, up 33.0% from last year's pace. Poor weather on the East Coast has some traders nervous that beef demand could decline over the near future. The estimated cattle slaughter came in at 127,000 head yesterday. This brings the total for the week so far to 508,000 head, up from 501,000 head last week at this time and up from 490,000 head a year ago. Boxed beef cutout values were up 38 cents at mid-session yesterday and closed 49 cents lower at $173.10. This was up from $172.81 the prior week. Average dressed steer weights for the week ending January 15th came in at 849 pounds, down from 852 pounds the previous week and up 1.19% from a year ago. Beef production for the same week came in at 491.8 million pounds, down 2.88% over year ago. For the USDA Cattle Inventory report today, traders see the US herd falling about 1.5% over the past year with the herd already at the smallest levels since the 1950's.
Join the Discussion