After a 4-day break, June cattle closed up 125 points on the session. June futures are trading at a significant discount to the cash market. That was seen as a short-term positive force, but many traders see a downtrending cash market and another 6 cent rally in wholesale gasoline prices yesterday does not bode well for consumer demand. The cattle market saw a recovery bounce yesterday but with a $3.00 break in the cash market this week along with weakness in the beef market, a negative demand tone still persists. June futures have taken a $3.00 discount to the cash market with a 600 point break off of last week's highs, but the demand tone remains negative. While grain traders were nervous over potentially negative developments from the FOMC meetings and the post-meeting Fed press conference, livestock traders feared potential positive news that might have supported commodity markets. Poor demand weather and consumer resistance fears for higher beef prices at the same time as higher gasoline prices has helped to pressure the market recently. Traders see $4 gasoline as a reason to cut-back on beef purchases, and recent weather has not been too conducive for outdoor grilling. Boxed beef cutout values were down 63 cents at mid-session yesterday, and closed 83 cents lower at $184.73. This was down from $188.89 the prior week and is the lowest beef market since March 11th. The estimated cattle slaughter came in at 129,000 head yesterday. This brings the total for the week so far to 352,000 head, down from 377,000 head last week at this time, and down from 383,000 head a year ago.
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