June cattle closed moderately higher yesterday and posted the highest closing price since April 12th. Outside market forces created a negative tone for the cattle market, with many traders nervous over the European economy. Weakness in the stock market was widely seen as a negative force as well but a recovery in equities market provided some support later on in the session. Beef prices appear to have stabilized, packer profit margins have turned positive and steer weights have come down sharply in recent weeks. In addition, June futures continue to hold a large discount to last week's cash market. Many traders see initial asking cash prices this week near $122.00-$123.00, as compared with cash markets near $120.00 last week. The showlist is generally expected to be higher this week than last week but the industry may need more cattle ahead as retailer demand begins to rise in anticipation of a more active demand period ahead. Seasonally strong upcoming demand may lead to a significant drop in placements over the next few months, as the market deals with extremely tight corn supply. Several of the most active demand weekends of the year will be seen in the next few months, and there may be some pent-up demand after recent scares with mad cow and pink slime. Slaughter came in a little higher than expected at 125,000 head, which could be a sign of a little stronger demand from the packer. This was up from 112,000 head last week but down from 129,000 head a year ago as this time. Boxed beef cutout values were up 29 cents at mid-session yesterday and closed 19 cents higher at $190.48. This was up from $190.33 the prior week.
Join the Discussion