By Cassie Fish, http://cassandrafish.com
It is par for the course recently, hitting mid-week with virtually no cash trade and bids scarce. One major packer bid $3 dressed less than last week’s market in Nebraska, to deaf ears. Given the small number packers purchased last week, one would think this week’s market is no worse than steady. But packers are shrewdly waiting until late week, hoping that helps their chances.
With pen conditions not great and frigid temps incoming for next week, there is some motivation to get cattle gone. This tough winter will continue to carve pounds away which means packers will have to harvest more cattle to achieve the same tonnage, something that has not been true in years.
Boxed beef values continue to decline seasonally. Middles seem to have caught, so it is the end cuts turn for weakness. Beef 50s are strong also. This morning the choice cutout was down $1.42 printing at $268.22, certainly expected given the calendar. Wholesale beef values will stay soft seasonally well into February, which historically pressures packer margins. Packer margins are still in the black thanks to a hard break in cattle costs last week.
After two positive days, CME live cattle futures today are chopping, selling off only to claw itself back to slightly green. It feels like a ‘pause’ day as the market waits for new news. Oct LC on back have made contract highs again today. Apr through Aug LC have made a new high for the move, leaving only spot Feb LC as the laggard.
'The Beef' is published by Consolidated Beef Producers