Credit: Shutterstock photoThe reversal-type action yesterday is impressive but the upside may be limited by the premium of futures to the cash market, the possibility of increased non-fed and cow slaughter ahead and by continued much heavier than normal weights.
Average dressed steer weights for the week ending August 11th came in at 862 pounds, which was unchanged from the previous week but still up from 846 pounds a year ago and up from the 5-year average of 846.4. With corn at $850-$900 in the southern plains, this is surprisingly high. With October cattle trading near 125, cash cattle traded at $120-$121 this week, which is steady from last week. Nebraska cattle, however, traded at $119.00-$120.00 this week, which was down $1-$2 from last week. Packer margins are still in the black which has helped to provide some support but traders are nervous over a possible lull in beef demand once Labor Day bookings are complete.
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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
