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The market seems to have posted a near-term low this week for the February and April futures while August has consolidated near the 87.00-88.00 range. The lack of a sell-off in beef prices this week and the move to the highest level in eight months for beef prices has helped to provide support and leaves cash and futures prices looking undervalued. February cattle closed higher yesterday and near the highs after choppy and two-sided trade as strength in the beef market helped support. Cheaper grain prices were seen as a bearish development for June and deferred contracts which closed under some pressure. The surge higher in beef prices is expected to drive packer margins wide enough to spark higher trade in the cash market in coming weeks. Texas cash cattle traded $.50 higher to $85.50 yesterday and this helped support the February futures as well. Beef exports for the month of November came in at 172.6 million pounds, up from 135.9 million the previous year but down near 4 million pounds from October. The estimated cattle slaughter came in at 127,000 head yesterday. This brings the total for the week so far to 379,000 head, unchanged from last week at this time but up from 359,000 a year ago. Boxed beef cutout values were up 79 cents at mid-session yesterday and closed 48 cents higher at $145.43. This was up from $139.45 a week ago and up to the highest level since May 28, 2009. We would believe cash cattle are likely to trade higher next week unless there is a sharp break in the beef market.
TODAY’S GUIDANCE: Packer demand for live inventory should turn strong with the beef rally and short-term bulls might concentrate on the February futures for now.
Cattle Market Commentary – 2010.01.14
by Terry Roggensack on January 14, 2010
Below is a sample of our Daily Commentary. To get this comment, and our daily coverage of 15 additional markets and trade ideas, visit futures-research.com for your free 2 week trial!
The market seems to have posted a near-term low this week for the February and April futures while August has consolidated near the 87.00-88.00 range. The lack of a sell-off in beef prices this week and the move to the highest level in eight months for beef prices has helped to provide support and leaves cash and futures prices looking undervalued. February cattle closed higher yesterday and near the highs after choppy and two-sided trade as strength in the beef market helped support. Cheaper grain prices were seen as a bearish development for June and deferred contracts which closed under some pressure. The surge higher in beef prices is expected to drive packer margins wide enough to spark higher trade in the cash market in coming weeks. Texas cash cattle traded $.50 higher to $85.50 yesterday and this helped support the February futures as well. Beef exports for the month of November came in at 172.6 million pounds, up from 135.9 million the previous year but down near 4 million pounds from October. The estimated cattle slaughter came in at 127,000 head yesterday. This brings the total for the week so far to 379,000 head, unchanged from last week at this time but up from 359,000 a year ago. Boxed beef cutout values were up 79 cents at mid-session yesterday and closed 48 cents higher at $145.43. This was up from $139.45 a week ago and up to the highest level since May 28, 2009. We would believe cash cattle are likely to trade higher next week unless there is a sharp break in the beef market.
TODAY’S GUIDANCE: Packer demand for live inventory should turn strong with the beef rally and short-term bulls might concentrate on the February futures for now.
Tags: Cattle, Livestock
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