April cattle closed slightly higher yesterday after choppy and two-sided trading as the market found support from higher beef prices this week, a lower US dollar and economic optimism. Additional support for cattle may have come from news that slaughter levels were higher than expected for the first few days this week, which may suggest better demand from packers in spite of their deep in the red profit margins. The cattle market's supply fundamentals continue to tighten, and many traders see the smallest increase in production from the first quarter to the second quarter in the past 12 years for 2012. Per capita supply this year is expected to be down 5% from last year. Cash cattle are bid at $121.00 this week with offers at $126.00 after trading $123.00 late last week. Margins improved in the past few days but remain negative. Slaughter yesterday was 120,000 head which was lower than market expectations. This brings the total for the week so far to 371,000 head, up from 363,000 last week at this time but down from 373,000 a year ago. Boxed beef cutout values were up 79 cents at mid-session yesterday and closed 88 cents higher at $186.56. This was up from $184.27 the prior week and is the highest beef market since January 12th.
Join the Discussion