Wholesale Beef Higher, But Cash Cattle Struggle
Beef packers continued to maintain their strangle-hold on the market this week. Rising boxed beef cutout prices will pad packer profits – likely to exceed $400 per head. Nothing seems to help cattle feeders’ efforts to push prices higher, including last week’s winter storm.
Cash fed cattle traded at $114 in the South in light volumes, steady with last week. A few cattle sold in the North at $115.50 per cwt., and on a dressed basis at $181 to $182 per cwt., steady to $2 higher. Cattle feeders are asking $116 to $117.
The Choice boxed beef cutout closed Friday at $241.24, up $2.03 per cwt. for the week. Select boxed beef closed at $229.78 per cwt., up $2.33 compared to last week.
Cattle futures broke down technically and finished close to their weekly lows. While funds have liquidated long positions since mid-month, there’s risk of additional selling pressure to start next week given weakening chart patterns.
February live cattle plunged $3.90 to settle at $113.10. April through December live cattle dropped $1.075 to $1.675. Feeder cattle ended $1.70 to $2.875 lower through the November contract. For the week, April live cattle dropped $3.675 to $120.00, while March feeders slipped 45 cents to $138.675.
Estimated weekly cattle slaughter was 666,000 head, compared to 628,287 last year. The total year-to-date was 5.166 million head, 4.2% below last year.