By Cassie Fish,Â CassandraFish.com
There was so much bad news around yesterday afternoon that CME cattle futures seemed doomed today. Instead, after a lower start, the market has bubbled up higher on the day, hanging around the 10-day moving average and acting like it might close above it. Given the volatility,, itâ€™s a coin toss whether the market will close higher or lower on the week though as the day goes on, itâ€™s looking more positive.
New lows for the year this week in the USDA select cutout, beef 90s, and the CME feeder cattle index and close to new lows in the cutout were discouraging to those who thought the market had finally found a bottom. A few cash cattle that traded yesterday afternoon at $195 dressed, around $123 live added to the bearishness and futures yesterday afternoon sold off before 4 p.m.
If the market can muster new highs for the week yet today, which would increase the technical momentum to the upside, the packer may lose some of the fierce grip he has had on keeping prices in check.
There is talk this weekâ€™s kill will come in at 564k, up 8k from last week. Next week will be curtailed due to the Thanksgiving holiday but the Saturday afterwards could come in as large as 60k. Last year we killed 570k and 492k for these same two weeks.
Retail beef features, especially on ground beef, are finally popping up around the country this weekend with prices under $3/pound being noted, the lowest prices in many months. It may be the week before â€œturkey dayâ€ in the U.S., but with the first really cold temperatures forecast to touch most of the central and eastern U.S. in the next couple of days, a pot of beef chili has strong appeal.
That same cold weather has 3-8 inches of snow to accompany it upper Plains and Midwest today and tomorrow. This storm system wonâ€™t threaten cattle but it does alter their energy requirements and can slow, what has been, record weight gain.
Last weekâ€™s 5-area average price was $127.04 and light bids at $127 have been picked up in Kansas in the last few minutes. Lots of packer interest has been noted in central Nebraska with bids at $195, fully steady with what little trade topped the market yesterday. Perhaps cash ends up fully steady or even stronger in spots after all this week as packers focus on procuring inventory for the last few big kills of the year before things start to wind down. The timing would be just about right.