Positive US economic news has added to the tone as US consumer spending saw the biggest rise in five months. A sharp drop in the US dollar and a jump in metal and energy markets helped to support.
Boxed beef cutout values were down 6 cents at mid-session yesterday and closed 9 cents lower at $190.83. This was down from $193.83 the prior week and beef prices are the lowest since August 15th. The USDA actual production and slaughter data for the week ending August 18th was released and showed actual slaughter for the first three weeks of August was down 3.1%, 2.95% and down 3.31% for the week ending August 18th.
However, beef production for the same three weeks was down.62%, down.35% and down.8%. This is due to the surge in cattle weights. Average dressed steer weights for the week ending August 18th came in at 865 pounds, up from 862 the previous week and up from 846 pounds last year.
There were 21 new deliveries posted overnight. Cash cattle in the southern plains are bid as high as $118 this week with offers at $122. October cattle closed unchanged on the session yesterday after choppy and two-sided trade. Some strength in hogs may have helped support the market on the break. A lack of deliveries and ideas that tightening supply into the fall will support the market was also seen as a factor to help support. Weakness in the beef market, ideas that cash will trade steady/weak this week and weakness in the US stock market were seen as negative forces.
Slaughter came in below trade expectations at 124,000 head, which can sometimes point to a weaker demand tone from the packer. This brings the total for the week so far to 500,000 head, down from 509,000 last week at this time and down from 513,000 a year ago.
Weekly U.S. beef export sales for the week ending August 23rd came in at 15,500 metric tonnes, compared with the prior 4-week average of 17,475. Cumulative sales for 2012 have reached 646,900 metric tonnes, up 3.2% from last year's pace.
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