Traders expect a seasonal rise in beef prices over the near-term but hefty pork production in recent weeks, expectations for more pork supply into the fall and cheap pork might be seen as a factor which that pulls demand away from beef.
October cattle closed 42 higher on the session Friday and managed to gain 45 points for the week. The market inched higher in quiet trade. Traders awaited new news on the cash market and this kept trade choppy. Cash traded at $123.00 in the southern plains the previous week but trade failed to materialize on Friday. Bids firmed to $122.00, with offers at $126.00. Fears of consumer resistance to higher beef prices in a period of weaker pork values is seen as a limiting force. In addition, traders see a short-term overbought technical condition.
Weekly U.S. beef export sales for the week ending August 30th came in at 18,200 metric tonnes, compared with the prior 4-week average of 17,400. Cumulative sales for 2012 have reached 665,100 metric tonnes, up 3.3% from last year's pace.
Slaughter came in below expectations at 126,000 head Friday and 42,000 head for Saturday. This brought the total for last week to 551,000 head, down from 641,000 the previous week and down from 579,000 a year ago. Boxed beef cutout values were down 65 cents at mid-session Friday and closed 83 cents lower at $190.73. This was down from $190.83 the prior week.
The Commitments of Traders reports as of September 4th showed Non-Commercial traders were net long 41,851 contracts, an increase of 692 for the week. Non-Commercial and Nonreportable combined traders held a net long of 17,391 contracts, up 2,084 for the week and the slight buying trend is seen as a positive.
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