After a gap higher open on Friday, August cattle went on to trade to its highest prices levels since May 16th. Strength in the futures market was quickly followed by a surge in cash cattle prices, with live cattle in Texas/Oklahoma trading at $108.00-$109.00 late last week. Some cash traders also noted a small number of cattle traded in Kansas at $109.00 earlier in the session on Friday. Cattle futures were able to overcome a general commodity liquidation trend during last week, as stronger beef sales and packer profit margins were seen as key positive factors for the market. The market is generally expected to start off trading higher this morning after a supportive USDA Cattle-on-Feed report, after nearly 700 point of gains during the past five trading sessions.
The report was widely considered to be supportive for prices, as May placements came in lower than expected while marketings for the month of May were much higher than expected. While On-Feed supply is still running ahead of year-ago levels, the difference has narrowed considerably during the past month. Some traders feel that while the report was generally supportive across the board, any positive effects during today's trading may be mitigated by the strong upward move the market already made this past week. Placements for the month were 89.2% of last year while marketings were 107.3%, as this shifted total on-feed supply to 104.1% on June 1st from 107.4% on May 1st. The estimated cattle slaughter came in at 129,000 head Friday and 40,000 head for Saturday. This brought the total for last week to 688,000 head, up from 678,000 head the previous week and up 3.1% from last year. Boxed beef cutout values were up 76 cents at mid-session Friday and closed 78 cents higher at $172.94. This was up from $171.55 the prior week.
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