October cattle closed 40 lower on the session Friday and up just 5 points for the week. Ideas that Thursday's selloff was overextended helped to support higher prices early in the session but weakness in grains and other agricultural markets helped to trigger a large selloff that took prices to their lowest levels since September 8th. A sharp decline in hog futures along with a rally in the US dollar were widely thought to have added to the negative tone. With increasing economic concerns, a sharply higher US dollar and weakness in other agricultural markets, cattle may be vulnerable to further pressure this week. Packer margins turned negative on Friday, and may dampen demand for live inventory this week. Tightening supply may provide some underlying support for the market during the weeks ahead but the short-term focus may be on a sluggish demand tone and negative macro-economic sentiment. There are some concerns over potential consumer resistance towards higher beef prices. The estimated cattle slaughter came in at 105,000 head Friday and 28,000 head for Saturday. This brought the total for last week to 653,000 head, up from 577,000 head the previous week but down from 674,000 head a year ago. Boxed beef cutout values were up 59 cents at mid-session Friday and closed 38 cents higher at $185.58. This was up from $180.13 the prior week and is the highest beef market since August 28th.
Join the Discussion