By Cassie Fish, http://cassandrafish.com
CME cattle futures are volatile today, staging an explosive early rally before selling off sharply from the highs by mid-morning. Futures are still higher on the week and the chance of a weekly key reversal are pretty much out of the question considering just how low last week’s low was. But a weekly hook down after making a contract high may be in the cards this week for all but the June, though there are two more days to trade. More than likely heavy commercial selling took place this morning, cattle feeders taking advantage of record high futures prices to lay off risk ignoring the fact futures remain stubbornly discount to cash.
At this writing, most active August LC is 300 points of today’s high and $15 discount to northern cash fed cattle prices. August is over $5 discount to spot June LC.
Speaking of cash, a cattle feeder in northwest Iowa sold cattle to a major packer for delivery the first week of July at $190/cwt. The bulk of the trade that occurred yesterday was at $190, the south not trading, with 18k head being reported in the national total. A $192 top was reported. The remarkably wide spread between the south and the north continues. Two major packers are bidding $181 in the south today and being passed. On a dressed basis $300/cwt bids and trade have been reported in the north.
Boxed beef values are higher too, the choice printing this morning at a new high for 2023, $323.77. A week ago today the choice cutout was $305.84. The entire carcass is increasing in value with the rib leading.
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