Posted on: Â 7/21/2017
By Cassie Fish, http://cassandrafish.com
Itâ€™s Friday and itâ€™s another rally day. Packer bids are multiple but not budging much- noted thus far at $118 and $188 dressed with hints of firmness. Offers are fully steady with last week if not even a little better. So, a modest stand-off is in play. There has been a minor trickle of trade in the north from $188-190 all week.
This weekâ€™s negotiated trade volume will be as important as this weekâ€™s price, for if packers donâ€™t buy deeply, their needs to replenish inventory next week will be greater- giving odds that next weekâ€™s price will be stronger than this weekâ€™s. This weekâ€™s slaughter is estimated at 630-633k and next week will be as large or larger.
CME cattle futures have a hopeful, grinding, front-end led rally going thus far but a breakout above yesterdayâ€™s high is still in the making. And for Aug LC, supplanting itself above the 40-day moving average and swing high of $118.80 remains necessary to keep the drive alive. The late July/early August seasonal for a low and rally is finally upon this market and it remains to be seen what it can make of it.
For the week, boxed beef prices have carved out a saucer bottom, sliding beneath $210 to settle least night at $207.65. Lots of business has been transacted this and last week at some of the lowest levels since April. Timing is right on the money for a seasonal cutout low and the key rib primal is showing promise being close to unchanged from last week. The choice/select spread has also narrowed seasonally from a monster $30 and is finally in to $12, which is perhaps as low as it goes considering the robust demand for upper choice and prime beef occurring in 2017 at the same time the percentage of choice cattle in the mix is the highest on record (over 73% for the week ended July 7).
This week has been a tedious one for traders and frustrating too. Super swingy chop, an atypical BSE finding and lots of energy expended without much reward as few can manage to trade this fickle market action with ease.
Todayâ€™s USDA reports will confirm expansion is underway and the fed cattle industry continues to aggressively market cattle to keep front-end supplies current. No surprises are expected.