By Cassie Fish, http://cassandrafish.com
The seasonal top in the wholesale beef cutout actually came later than usual this year by a week or so and the choice has lost not quite $8 since the Wednesday before Thanksgiving. Currently, the loin is leading the break, down $15 from a week ago, followed by the chuck down $10 and round down $9. The rib, which typically does not top until December 10 or so, made a new all-time Q4 high today at almost $516! Tis the season.
What also is the season is the continuation of the cutout decline back to $210 to $215 over the next 3 weeks. This year’s much-smaller-than-normal Christmas week slaughter schedule likely to create a mini-vacuum that may cause a bigger bounce heading into the New Year than typical.
This week’s negotiated cash cattle average price looks to be about .50 cents cheaper than last week, the third week out of four at $109ish. With 85k traded as of yesterday, this week’s ultimate total will likely be close to last week’s 89k head. Most are calling next week’s cash cattle trade steady to mostly lower and packers will be advertising how many plants ‘are full’ for the rest of December to keep the pressure on producers.
The estimated slaughter for this and the next two weeks is 655k to 660k.
CME cattle futures broke hard yesterday, retreating from highs made mid-week only to make a new low for the week today. Dec and Feb LC are the weakest of the group, eroding to levels not seen since early last week. The important low made Friday, November 20 though, is still a ways away. Really it just more chop in a broad trading range up front, while buying continues to seep into Apr LC futures and all contracts for the rest of 2021 as well as feeder cattle contracts as optimism for that time frames continues to build. Most contracts will likely close lower on the week today, after closing higher on the week last week, though Dec LC 2021 and August feeders may well close higher.
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