August cattle experienced the lowest close since May 11th yesterday, and followed the stock market lower even with a strong recovery in beef prices. There is a growing sense from many traders that demand and supply forces were turning negative, as poor consumer sentiment could weaken demand levels already hurt from slumping equity and energy markets. A rally in the US Dollar to the highest levels since August of 2010 was also thought to have pressured the market as well. A stronger US dollar discourages exports and encourages imports. Ideas that cash markets could be steady to lower this week and weakness in other commodity markets added to the negative tone of the market. The cattle market has seen a sharp selloff during the past week, as demand fears are on the rise and many traders see ample supply for the next few months before supply drops again in August and September. Boxed beef cutout values were up $1.24 at mid-session yesterday and closed $1.26 higher at $197.00. This was up from $194.28 the prior week and is the highest since March 7th and approaching all-time highs near $200.00. Packer bids are at $118.00 in Texas as compared with trade last week at $121.00. Slaughter came in higher than expected at 130,000 head. This brings the total for the week so far to 263,000 head, down from 376,000 head last week at this time and down from 264,000 head a year ago.
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