Hanging Out

By Cassie Fish, http://cassandrafish.com

It’s been a green day for CME cattle futures and early the market seemed content to hang out mid-range in the same consolidation pattern. But as the day has worn on, April LC has gotten stronger, gaining on June despite any pre-roll before the Goldman roll begins this Thursday.  There are three highs looming over April LC, all etched in the last couple of weeks, $188.95 reached Friday and $189.15 and $189.20 scored three days apart in late February. Will cattle futures break out of the February trading range in March? That’s the question on many minds.

 The USDA’s estimated boxed beef cutout value this morning took a step back, printing down $1.14/cwt at $305.16 after reaching a new high for the move yesterday afternoon. Reduced through put has been supportive of boxed beef prices for going on three weeks, though talk of good clearance to consumer over the most recent weekend has been circulating and last week’s movement in the spot and formula categories was good. The remaining categories, such as export and 22+ day sales, were very disappointing.

Packer margins remain pinched but losses so far are being minimized, though not eliminated by the kill cuts. Yesterday’s slaughter was reduced 6k head from the prior Monday clocking in at 116k. Estimates for this week’s throughput are 590k to 600k head.

Thus far, no negotiated fed cattle trade of note has occurred but cattle are priced higher as would be expected.  

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