Cattle futures fell sharply lower for the session early Wednesday, pressured by continued macro economic fears. Poor economic news from China plus a poor Bund auction in Germany were thought to have weakened most economic sensitive commodity markets. A rally in the US dollar added to the negative tone but news that the cash market traded $2.00 higher at $124.00 in Texas helped to lift the market above Tuesday's highs into mid-session. The cattle market has held onto a portion of recent gains during a period of very negative outside market forces. There are widely held ideas that poor consumer confidence and sluggish packer profit margins will put pressure in beef prices and spark weakness in the cash markets. However, beef prices have remained strong over recent weeks and rose to a new 8-year high on Wednesday. December cattle has already recovered near half of the losses from the November 4th to November 21st selloff. The estimated cattle slaughter came in at 131,000 head on Wednesday. This brings the total for the week so far to 394,000 head, up from 377,000 head last week at this time but unchanged from a year ago. Boxed beef cutout values were up 90 cents at mid-session Wednesday and closed 20 cents higher at $197.07. This was up from $195.45 the prior week and is the highest trade for beef prices since October 20th of 2003.
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