Posted On: 05/15/2017
By Cassie Fish, http://cassandrafish.com
The enthusiasm related to the late week announcement regarding the opening of U.S. beef access to China faded over the weekend and the downtrend in place since the May 4 top, continues today.
The markets focus today is solely on expectations of lower cash cattle prices this week and an imminent top in boxed beef prices. Some boxed beef items have reached record high price levels and a correction will be underway shortly, with an extended downtrend that will stretch well into the summer.
The rib primal reached the highest level in history last week and the high prices will reduce the number of aggressive features going forward. Various end users are still being forced to pay up to meet immediate needs but when the opportunity to turn the table presents itself, it will be met with a great deal of enthusiasm.
Cash cattle prices dropped a big $7 last week, mirroring on the down, the big up seen earlier this month. Showlists in the south are increasing modestly and packers are planning on buying cattle another $3-5 lower this week.
Packers stepped the kill down a bit last week, coming in at 609k and this week looks to be the same as they make an effort to stabilize and expand margins the remainder of Q2.