In Cattle Markets by The Beef & Cassandra Fish

By Cassie Fish,

Despite 64 new deliveries and 45 retenders yesterday afternoon and some light cash trade in the south at $120, April LC continue to hold this week’s gains and are trading higher on the day. The on-line fed cattle auction saw some $121 trade south and $122.75 trade north. All of these prices are higher than last week and are the highest negotiated fed cattle cash prices since February 2020.

Some southern cattle feeders are frustrated by the premium futures market, which so far has portended higher prices correctly. They are peppering the April contract with deliveries, remembering the windfall basis of a year ago.

Meanwhile, beef demand is off the charts and cutout values are soaring. Domestic food service and retail sales are super strong as the industry heads into it’s peak beef demand time frame and export sales are beating a year ago- a true growth area for the U.S. beef industry. There is no talk of a top in the cutout because much of the beef being produced is already spoken for via sold-aheads or formula sales.

Unfortunately for the cattle feeder, the packing industry is pocketing most of the additional revenue as packer margins, which made a new high for the year last week are set to make another new high this week. Margins have blown out over $400 per head.

This week’s slaughter is estimated from 644k to 655k depending on who you ask. Slaughter will increase significantly in May and June.

Copyright © 2021 the Beef Read. All rights reserved

The Beef is published by Consolidated Beef Producers

Use of part or all of this blog for any reason without permission is strictly prohibited. 

Disclaimer:  The Beef, CBP, Cassie Fish nor NFC Frontier Capital Markets shall not be liable for decisions or actions taken based on the data/information/opinions.

This material has been prepared by a sales or trading employee or agent of New Frontier Capital Markets and is, or is in the nature of, a solicitation. This material is not a research report prepared by New Frontier Capital Markets. By accepting this communication, you agree that you are an experienced user of the futures markets, capable of making independent trading decisions, and agree that you are not, and will not, rely solely on this communication in making trading decisions. DISTRIBUTION IN SOME JURISDICTIONS MAY BE PROHIBITED OR RESTRICTED BY LAW.  PERSONS IN POSSESSION OF THIS COMMUNICATION INDIRECTLY SHOULD INFORM THEMSELVES ABOUT AND OBSERVE ANY SUCH PROHIBITION OR RESTRICTIONS.  TO THE EXTENT THAT YOU HAVE RECEIVED THIS COMMUNICATION INDIRECTLY AND SOLICITATIONS ARE PROHIBITED IN YOUR JURISDICTION WITHOUT REGISTRATION, THE MARKET COMMENTARY IN THIS COMMUNICATION SHOULD NOT BE CONSIDERED A SOLICITATION. The risk of loss in trading futures and/or options is substantial and each investor and/or trader must consider whether this is a suitable investment. Past performance, whether actual or indicated by simulated historical tests of strategies, is not indicative of future results. Trading advice is based on information taken from trades and statistical services and other sources that New Frontier Capital Markets believes are reliable. We do not guarantee that such information is accurate or complete and it should not be relied upon as such. Trading advice reflects our good faith judgment at a specific time and is subject to change without notice. There is no guarantee that the advice we give will result in profitable trades.

Please follow and like us: