Kevin Penner: September cattle prices seen steady
After failing to trade higher last week, and after a $5 jump the previous week, it looks as though Cash Cattle may need more time to rebalance as the Call this morning was Steady/Lower for the week.
Last Tuesday, we saw Texas cattlemen start to sell fat cattle at $99.50/cwt and then at $99.00, as the five dollar move the week before was aggressive enough to still buy cattle. Packers came through early in the week and they were attempting to squash any ideas of $101 being necessary to buy finished cattle. As the futures board at the CME Group started to show weakness throughout the day the packers were able to get their needs met and major trade was finished for the week by end of business on Tuesday.
The weakness seen on The Board turned out to be a technical key-reversal (where the previous day's high is surpassed but then the Close is Lower for the day) and it precipitated a one dollar plus move lower on the October Live Cattle futures for the week. This week we saw lower trade on Monday and Tuesday's Globex session on Monday evening was also lower shortly after the Open.
Boxed Beef values remained strong for most of last week but they were reported lower by Friday and were mixed today. Domestic retail weekend sales are being reported as lower today as well. Add to those factors the holiday-shortened week next week (packers are out this week looking to fill order for next week) and there is not much bullish news right now to allow the Call to be anything more than Steady/Lower.