By Cassie Fish, http://cassandrafish.com
The beef packing industry continues to underperform, despite the fact it is May and that May and June are typically the two largest fed cattle slaughter months of any year. Monday’s slaughter was revised down to a mere 112k as one plant attempt to finesse a recent equipment install. Yesterday’s and today’s slaughter was better at 118k but falling short of the +120k head needed this time of year.
In the south, one big plant is rumored to be dark this Saturday and another the following Saturday. This is challenging news indeed as weekly fed slaughter ought to be +520k head from now until mid-July. This week looks like it might only reach 511k head.
With boxed beef prices in the stratosphere, $314 choice this morning, packers paid $119 to $120 on light trade today, a little higher than last week, but hardly a blip on the radar when you consider packing margins are +$800 per head.
Futures Mostly Green
Spot June LC today has traded both sides of steady and tested its own 40-day moving average repeatedly but could not overcome that obstacle. The rest of the strip is above its key moving averages and either making contract highs or eyeing them.
A bearish USDA corn report this morning has boosted feeder cattle futures and sent a wave of relief through livestock producers.
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