It’s Everywhere

By Cassie Fish,

It may only be the end of the second month of 2023, but high prices are everywhere. Record high wholesale beef prices? Check. Highest cash fed cattle prices since March 2015? Check. Highest CME live cattle futures prices since December 2014? Check.

Today, February LC expires and its $167.50 high establishes for the record books, that 2023 live cattle futures have reached the historically high territory of 2014. Today’s strong expiration in February has left the other contracts in the dust and February almost $2/cwt premium to April LC.

The technical debacle in corn futures, fueled by a waning drought and expectations of a large crop, has given a huge boost to feeder cattle futures which have been gaining on live cattle futures as of late.

Expectation for this week’s negotiated fed cattle market are higher, another buck from last week’s almost $3/cwt gain. Last time cash was this high, packers were red. Not so this time with boxed beef values averaging $26/cwt last week above one year ago. Packer margins actually expanded last week, pushing back above $100 per head which is remarkable.

The select cutout is really on fire, gaining on the choice cutout and narrowing the choice/select spread to just under $9/cwt, which is close to the 5-year average. According to the USDA, the percentage of choice and prime carcasses was record high.

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