June cattle closed slightly higher on the session yesterday after choppy and two-sided trading action. The market continues to consolidate the steep losses from last week and remains at a significant discount to last week's cash trades. Weakness in outside market forces and a further drop in hogs helped to pressure the market into mid-session but reports of strong gains in the beef market on Friday and ideas that producers are getting more current with their marketings were thought to be supportive factors for the market. Slaughter came in well below expectations at just 112,000 head. This was up from 97,000 head last week but down from 120,000 head a year ago at this time. A rebound in the beef market during the last few trading sessions combined with an active volume of boxed-beef trading last week has helped to support the market. A tightening supply outlook for both pork and beef into the spring and improving demand weather are factors which could provide additional support for the market. Packer margins are still deep in the red but are improving with the jump in beef prices. The steep drop in steer weights suggests for many traders that the industry is getting more current with marketings. A portion of the weaker demand tone has already priced into the market, with futures holding a discount to the cash market. Boxed beef cutout values were up $1.83 at mid-session yesterday and closed $2.75 higher at $181.26. This was up from $178.61 the prior week and is the highest beef market since April 3rd.
Join the Discussion