October cattle closed higher yesterday while August cattle closed moderately higher, with prices back up near the July highs as many traders remain positive over the short-term outlook for the beef market. Futures prices moved from the lowest levels since July 29th early yesterday to moderately higher for the day, led by a strong recovery in the US stock market. This rally occurred despite news of weaker export demand this week as well as rising deliveries against the August contract. The market traded mostly sideways to higher in the last few weeks during a period of significant negative economic news and down-trending equity markets. October futures are already holding a $4 to $5 premium to the cash market, which indicates that many investors may be projecting higher beef prices and tightening supply in the weeks ahead. There are indications that only 623 loads of beef were headed for the export market this week, the lowest weekly total since March. This would suggest a weekly export total on Thursday morning of near 11,700 tonnes, as compared with 17,200 tonnes last week. There were 12 deliveries yesterday and no new deliveries this morning. Cash cattle this week is offered at $114.00 to $115.00 in the southern plains, which is $1-$2 higher but there were no packer bids reported. The estimated cattle slaughter came in at 129,000 head yesterday. This brings the total for the week so far to 255,000 head, up from 253,000 head last week at this time and up from 253,000 head a year ago. Boxed beef cutout values were up 61 cents at mid-session yesterday and closed 69 cents higher at $174.94. This was up from $173.77 the prior week and the highest since July 28th.
Join the Discussion