Yawn

By Cassie Fish, http://cassandrafish.com

Well, it is the dog days of summer in CME cattle futures. Welcome to another day of choppy trade and no new news. Cash trade is at a standstill. The wholesale beef market printed $1.45 lower today after gaining over a dollar yesterday meaning the choice boxes continue to hang out in the upper 260s in early August.

There some interesting fundamentals worth discussing, one being grading which dove to the 5-year average in the most recent USDA report. Some states like Nebraska have fallen below the 5-year average, though one-week does not make a trend. Still with such aggressive fed slaughter schedules, packers are blowing through the large summer fed cattle supplies with ease.

This week’s estimated F.I. slaughter is 665k to 670k on the heels of several 665k or higher slaughters since Memorial Day. Yes, the industry is slaughtering a lot of cows, but the fed slaughter pace is elevated enough to contribute to increasing currentness. Only one of the last seven non-holiday slaughter weeks was under 665k.

Packer margins last week were the second most profitable in history for that week behind 2021. So, there is plenty of incentive to run hard now that the labor situation has stabilized.

And keep in mind big kills mean big beef production, yet the cutout level is very strong for the summertime. Boxed beef values are the second highest in history for early August, again behind a year ago.

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