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Morning Cattle Market Report

August cattle closed moderately higher on the session yesterday, but well below the early highs. The market traded higher after the positively received USDA grain report, and the market rose towards the highest prices level since May 20th. Weakness in beef prices was seen as a key factor with triggering the setback from the highs. Ideas of higher cash cattle trading this week along with ideas that producers will move cattle to the market at lighter weights due to higher corn prices were seen as supportive factors for the market. Deferred cattle contracts were strongest on the day due to the corn rally. With beef prices at their lowest levels since March 1st, some traders feel that packers may not get enthused about bidding higher or even steady prices for cash cattle next week. Weekly U.S. beef export sales for the week ending June 2 came in at 9,200 metric tonnes, compared with the prior 4-week average of 13,800 tonnes. Cumulative sales for 2011 have reached 422,500 metric tonnes, up 31.8% from last year's pace. This was the lowest weekly total since the first week of the year. The USDA supply/demand update showed an increase in production for 2011 of 45 million pounds, but this was more than offset by a revision higher in exports of 117 million pounds. The estimated cattle slaughter came in at 127,000 head yesterday. This brings the total for the week so far to 507,000 head, up from 397,000 head last week at this time and up from 504,000 head a year ago. Boxed beef cutout values were down $1.38 at mid-session yesterday and closed $1.57 lower at $172.58. This was down from $177.76 the prior week and is the lowest beef market since March 1st. Average dressed steer weights for the week ending May 28th came in at 820 pounds, up from 819 the previous week and up 1.23% from a year ago. Beef production for the same week came in at 511.7 million pounds, up 0.59% over year ago.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.


The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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