Cash Surges Again; Futures Consolidate

By Cassie Fish,

The negotiated fed cattle trade is underway in Texas and Kansas, cattle trading $2 higher than a week ago at $150, another new high for the year. The north is slower to trade, but talk is western Nebraska feeders are priced at $155. As steer and heifer slaughter stays elevated this October, front-end supplies are tightening noticeable week after week. A trend that will intensify for the remainder of 2022 and all of 2023.

CME cattle futures broke out in a major way this Monday and have spent the time since consolidating above the old contract highs. This is typical actually, futures first, cash second and boxed beef prices last. Open interest has now increased about 22k contracts in the last four trading days, a very big number in such a short time frame.

Indeed boxed beef prices have been sharply higher in recent days, the choice printing at $261.34 this morning, about $18/cwt above the late September seasonal low. It took a while for the seasonal rally to kick in, but kick in it has.

USDA released its actual slaughter and carcass weight data just moments ago and steer carcasses were reported at 924 pounds for the week ended October 16. Steer and heifer slaughter that week was 509k head, good for October.  Packers are now able to get more cattle harvested Monday through Friday than the last three years, taking some of the pressure off Saturday.

The cattle and beef market, cash and futures, are poised to post a strong and dynamic November.

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