By Cassie Fish, http://cassandrafish.com
CME cattle futures, which reached all-time highs last week closed lower today, beginning a correction from an overbought technical point. This, following a surge in negotiated fed cattle prices last week, up $1.74 from the prior week at $184.04. That’s the highest price since mid-August and confirmation that the September check of the summer low (which was made just prior to July 4th) is behind this market. Higher cash cattle prices are what lie in store for cash cattle prices for the rest of 2023 and into 2024.
The boxed beef market, always last to the party, appears to finally be carving out a low around $306 and ought to seasonally gain in value too in Q4. Considering beef production last week was down 7% from a year ago, the sluggishness of the boxed beef market seems especially bleak. Only the round, which was barely lower on the week and beef 90s, which made another new all-time high, escaped the drumming the rest of the carcass took.
Stronger cattle costs against a floundering beef market mean packer margins narrowed and are probably close to a scratch. Last week’s 632k head slaughter was only a tiny improvement and this week’s harvest is estimated at 625k to 630k head. Very few plants now run on Saturday and that is expected to continue to a very long while.
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