By Cassie Fish, http://cassandrafish.com
A major packer has paid $174/cwt in Texas on a few thousand head this morning, $1 higher than a week ago as the negotiated fed cattle trade gets underway. As of yesterday, trade in any major cattle feeding states was zilch. Some feeders in Texas are priced at $175 and some Kansas feeders are priced at $176. Negotiated fed cattle prices have not averaged above $175 since pre-Thanksgiving.
CME cattle futures have rallied back to Thanksgiving week levels, obviously making new high for the move since the major bottom made December 7. Futures are creeping further into overbought territory. February LC has retraced 38% of its break after topping last September. Futures have been unable to build open interest on this rally in fact, have given back 4k contracts, not a reassuring sign.
Boxed beef values may have about run their course after pushing up over the $300 mark this week, the highest since October 2023. The impetus of course is a severe short supply thanks to major production disruptions slashed product availability. The resulting high prices may have about played itself since this week’s slaughter is estimated at 630k head and today’s cutout value was reported trading $1.12/cwt lower. February and early March are a seasonally weak timeframe for wholesale beef prices.
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