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.

Copyright © 2022 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: