Boxed Beef Sales Soar

By Cassie Fish, http://cassandrafish.com

Yesterday’s USDA Weekly Comprehensive Boxed Beef report showed a surge in boxed beef sales last week, especially in the +22 day sales and export sales. March has seen record beef production but the supply has been met with extraordinary demand.

This is all very good news because out-front beef sales deduct from product available in the spot market at a later time. And peak U.S. beef demand is Q2 when some of this beef will be shipping- either domestically or overseas.

Export demand is being supported partially because other nations, such as Australia, Argentina and Brazil are unable to meet global beef demand as they did last year. Argentina discovered fraud on the export side and have sidelined some companies. The other two countries simply don’t have cattle supplies to support big exports.

Packers respond to filling orders and if demand is active and more supply is needed to fill immediate demand, the decision to add slaughter shifts occurs. Expect bigger slaughters in Q2 weekly as the market moves through available supplies of market-ready cattle a healthy pace. No longer will the Covid hangover be distinguishable as it has been.

The daily boxed beef quote is up sharply this morning and all indications are that more upside is coming over the next few weeks.

Expectations are that cash cattle prices will advance again this week too, possibly gaining more momentum than has been the case for quite some time.

CME cattle futures had a big up day yesterday, making contract highs in some cases, accompanied by improving volume and a nice increase in open interest. Today futures have traded both sides. Technically the market is not overbought and more upside is anticipated.

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