By Cassie Fish, http://cassandrafish.com
There are plenty of $205 dressed bids around this morning- bid by multiple packers both large and small. So far, bids are being passed. Even a $207 has been rumored. Last week’s practical top was $200 in the north, so cash prices will be higher this week after all. In western Nebraska, bids just jumped to $130, equal to the outside top scored last week on very few head. It certainly appears the cash market will return to the $132-133 area this week.
Fewer, greener offerings are finally providing support to the cash market. Several consecutive weeks of big kills have made a difference. This week’s kill is expected to come in at 585k, 17k bigger than a year ago. Bigger kills than a year ago are expected to continue to be the case into the summer.
Boxed beef prices continue their dramatic rally with choice headed to $220 or possibly higher, with the strength maintained through next week.
CME cattle futures response to the strong cash cattle and beef action has been muted so far. Lead month Jun LC has yet to take out $124.02 and make a new high for the week. A close above that level will set up a test of the $125-126 area and above that lies the top of the trading range and the major resistance level of $130. Few were betting that was possible just a couple of weeks ago. Unlike when the market bottomed in December, now CME cattle futures are loathe to lead the way up and only if cash cattle prices buck the seasonal the next few weeks will the futures market respond.
Average retail beef prices in the Wall Street Journal weekly survey fell to $4.84/pound, down $0.15 from a week ago and down $0.79 from a year ago, good news for consumers and cattle feeders. Plentiful supplies and the lowest wholesale prices in a long time are finally making a difference.