Cattle Continue Historic Price Rally As Cattle Feeders Gain Leverage
Negotiated cash cattle prices have surged $10 higher over the past two weeks, posting a record high price of $175.38 per cwt. on Friday. (USDA quoted steers at $174.62 with the heifers at $175.38.) The previous record was $171.38 printed in November 2014.
Packers were aggressive bidders in all areas and bought 103,000 head on a negotiated basis. Analysts note the packers are attempting to grab all the inventory they can now as supplies are expected to tighten going forward. That’s a clue cash prices could go even higher this week.
Wholesale beef prices are also working to the cattle feeders favor. Monday morning’s Choice boxed beef printed at $292.94 per cwt., up $1.96 from Friday’s close. That’s an historic seasonal price for wholesale beef, and analysts think a post-Easter bump in demand could keep that rally going. The higher wholesale prices will work to keep packers’ margins in the black even as they pay up for live cattle.
This week’s slaughter numbers are expected to reach 630,000 head, which would be an improvement over last week’s holiday-shortened number of 603,000. With carcass weights dropping, last week’s harvest pushed beef production well below the five-year average.
At the CME, April Live cattle were up 30 cents to $171.375 and June rose 60 cents to $163.70. April feeders were up 30 cents to $200.925.
