Home / Markets / Markets Analysis / Beef market / Kevin Penner: Cattle market strengthens

Kevin Penner: Cattle market strengthens

08/10/2010 @ 7:38am kevin@agtradertalk.com

Cash Cattle showed considerable strength last week trading at $93.00 - $93.50 / cwt and $148.00 - $148.50 on a dressed basis. A midweek rally at the CME Group emboldened feedlots to hold out until late in the week. A Thursday rally then allowed cash trade to occur at a higher level, despite calls for lower trade at the beginning of last week. 

This week, we see similar circumstances. A lower close on the Board last Friday and a failed rally on Monday of this week. This does not set the stage for a higher cash trade. However, Cash Cattle are called Steady to $1 Higher this week and another day of strength in Chicago may be what again sparks this week's trade.

Positive factors lending support to the idea of a higher trade this week are:  continued strength in the Boxed Beef market and tighter showlists for the week.  Beef prices are reported to be at a 1 1/2 week high and tighter showlists means less cattle will be offered for sale to Packers.  A look at the Oct and Dec futures contracts trading at 95.50 and 97.50 tempts feedlot owners to hold cattle for a few weeks. 

Average packer profit margins are reported to be at a loss of $14.50 per head. This set-up will likely result in smaller Slaughter Totals this week which could temper some of the demand seen by buyers of cash cattle. Cattle are offered at $95 as of today and there have been no reported bids this week.

 

Kevin H. Penner

Commodity Services, Inc.

1901 NW 92nd Court, Suite B

Des Moines, Iowa 50325

(515) 251-3100 Office

(800) 274-2074 Toll Free

(515) 251-3133 Fax

(515) 770-1619 Mobile

kevin@commodityservices.com

CancelPost Comment
MORE FROM KEVIN PENNER more +

Cash cattle reach $104 By: 12/02/2010 @ 8:13am Cash Cattle saw an unexpected jump this week to $104 in the southern Plains of Texas and to $165 in…

Kevin Penner: Still higher cash cattle… By: 10/25/2010 @ 2:39pm After a sharply higher cash trade last week (cash cattle were up $5.50 to $102.50) the Call for…

Kevin Penner: Cattle prices seen… By: 09/14/2010 @ 1:19pm DES MOINES, Iowa--Cash Cattle were able to trade steady to higher at mostly $97/cwt last week and…

MEDIA CENTERmore +
This container should display a .swf file. If not, you may need to upgrade your Flash player.
Case IH Magnum Rowtrac