August cattle closed sharply higher on the session yesterday, with many traders feeling the market found support from positive short-term cash market signals and a strong rally in the hog market. A shift from positive to negative for outside market forces had the market under pressure early and negative economic news for the US economy was thought to have added to the negative overall tone of the cattle market. However, the discount of futures to the cash market and a continued strong trend in beef prices, plus a recovery in the stock market, helped to support a late rebound in cattle futures. Weak manufacturing surveys for the UK and China overnight helped to drive global financial markets lower. With talk of improving packer margins, many traders see cash cattle trading at least steady this week at $121.00. A surge in beef prices may have helped insulate cattle from bearish outside market forces but the weakening economic tone for China, Europe and the US continues to rattle investors, which could overflow into commodity markets like cattle during the near future. Boxed beef cutout values were up 77 cents at mid-session yesterday and closed 31 cents higher at $197.31. This was up from $195.37 the prior week and is the highest beef market since March 7th. Slaughter came in at 130,000 head, which was higher than expected and could be a signal of stronger than expected demand for live inventory. This brings the total for the week so far to 393,000 head, down from 502,000 head last week at this time and down from 394,000 head a year ago. Average dressed steer weights for the week ending May 19th came in at 841 pounds, up from 835 pounds the previous week and up from 822 pounds last year.
Join the Discussion