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While the outside markets have signaled the possibility of weaker consumer demand ahead with weak consumer sentiment and poor economic news, beef prices have inched higher for the past few weeks and reached the highest level since June 9th. This sparked a better than expected trade in the cash cattle market this week and supported the solid gains in futures yesterday. Cash cattle traded steady in the southern plains at $91.00 this week and $1.00 higher to $92.00 in Nebraska. August live cattle rallied sharply yesterday off of a surging corn market. Corn went to limit up after the Quarterly Grain Stocks and Acreage reports showed a surprising drop in corn planted acreage for this season and lower than expected stocks in storage as of June 1st. Higher corn prices add to the cattle feeding costs, and it is expected that this will cause beef production to eventually drop. This was especially supportive to deferred contracts. Also supportive was a higher stock market, although most of those gains have been pared as we moved through the session. The estimated cattle slaughter came in at 129,000 head yesterday. This brings the total for the week so far to 387,000 head, unchanged from last week at this time but up from 385,000 a year ago. Boxed beef cutout values were up 43 cents at mid-session yesterday and closed 44 cents higher at $155.56. This was up from $154.47 the prior week and is the highest beef price since June 9th.
TODAY’S GUIDANCE: Supply news is somewhat supportive and beef prices have firmed up over the past several weeks, so the downside looks limited unless outside forces remain a significant bearish force. Beef prices could push higher next week “if” the reduced slaughter provides some support, and “if” retail beef clearance for the weekend is favorable. Packer margins are still in the black, which should be seen as a positive short-term force.
TODAY’S MARKET IDEAS: August cattle support is at 89.25 with resistance at 90.40. A move through resistance might be considered an upside break-out and leave 91.40 and 92.37 as next upside objectives.
Cattle Market Commentary – 2010.07.01
by Terry Roggensack on July 1, 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!
While the outside markets have signaled the possibility of weaker consumer demand ahead with weak consumer sentiment and poor economic news, beef prices have inched higher for the past few weeks and reached the highest level since June 9th. This sparked a better than expected trade in the cash cattle market this week and supported the solid gains in futures yesterday. Cash cattle traded steady in the southern plains at $91.00 this week and $1.00 higher to $92.00 in Nebraska. August live cattle rallied sharply yesterday off of a surging corn market. Corn went to limit up after the Quarterly Grain Stocks and Acreage reports showed a surprising drop in corn planted acreage for this season and lower than expected stocks in storage as of June 1st. Higher corn prices add to the cattle feeding costs, and it is expected that this will cause beef production to eventually drop. This was especially supportive to deferred contracts. Also supportive was a higher stock market, although most of those gains have been pared as we moved through the session. The estimated cattle slaughter came in at 129,000 head yesterday. This brings the total for the week so far to 387,000 head, unchanged from last week at this time but up from 385,000 a year ago. Boxed beef cutout values were up 43 cents at mid-session yesterday and closed 44 cents higher at $155.56. This was up from $154.47 the prior week and is the highest beef price since June 9th.
TODAY’S GUIDANCE: Supply news is somewhat supportive and beef prices have firmed up over the past several weeks, so the downside looks limited unless outside forces remain a significant bearish force. Beef prices could push higher next week “if” the reduced slaughter provides some support, and “if” retail beef clearance for the weekend is favorable. Packer margins are still in the black, which should be seen as a positive short-term force.
TODAY’S MARKET IDEAS: August cattle support is at 89.25 with resistance at 90.40. A move through resistance might be considered an upside break-out and leave 91.40 and 92.37 as next upside objectives.
Tags: Cattle, Livestock
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