Posted on: 02/16/2017
By Cassie Fish, http://cassandrafish.com
After much discussion regarding how much today’s slaughter could be impacted by the “Immigrant Worker Strike”, it turns out almost all cattle plants are running at normal, or slightly reduced speeds. Shortfalls, if significant, could be made up Saturday. This week’s kill is still expected to be in the 570-575k range.
CME cattle futures opened lower this morning after yesterday’s disappointing close, possibly in response to the nervousness surrounding the work slowdown. The low of the day was made early and the market has spent the rest of the morning clawing back to green.
Bids have surfaced at $186 dressed in the north and $116 in the south- all being passed. Cash prices are expected to trade lower this week, but very likely will be at least a couple of bucks above these bids.
Boxed beef prices are holding together well and there is not much beef for sale, paving the way to a gradual increase going forward. With production levels seasonally smaller and buyer interest continuing to surface, the outlook here is positive.
Today’s export report showed beef exports continue to be brisk YTD.
The Wall Street Journal’s weekly retail meat and poultry survey showed beef prices getting cheaper while pork and poultry prices edge upwards. The average beef price was $4.60 per pound, compared to $4.70 last week and $4.97 last year. Pork jumped up 0.58 cents per pound to $3.03 while chicken increased a dime to $1.77 per pound. Beef no longer seems out of line in comparison. Pork prices are expected to continue to edge higher at least in the short-term.
Futures are continuing their choppy, rather uninspiring trade as open interest continues to drop in the Feb and Apr, day after day. With the stable outlook for boxes and cash cattle prices, the futures’ discounts are perhaps, more than adequate. It’s obvious a move and close above yesterday’s highs would excite, but the market seems intent on conservative consolidating action for now.