Cattle futures posted gains during Wednesday's session, as ideas of tightening supply ahead was enough to offset sloppy near-term cash fundamentals. The market was also supported by firm Chinese economic news and from a sharp selloff in the US dollar, but more talk of weaker packer margins helped to keep prices below their highs. Tightening supply is seen as a positive force for cash markets but beef prices have lagged, and this may drive packer margins deep into the red. Cash markets traded at $124.00 last week, down $2.00 for the week and offers emerged this week at $126.00. If there is a shift to begin to expand the US herd, the near-term supply of cattle will tighten further as there will be fewer heifers available to move to feedlots. Slaughter levels came in right as expected at 124,000 head, which brings the total for the week so far to 363,000 head, down from 369,000 head last week at this time but up from 361,000 head a year ago. Boxed beef cutout values were up $1.04 at mid-session yesterday and closed at $184.27. This was down from $184.85 the prior week.
Join the Discussion