This Tuesday, the June contract was hit hard with a $1.57/cwt. decline even as boxed beef cutout prices strengthened.
Fed cattle fundamentals point out the larger finished cattle supply in June as a cloud hanging over the market. On the other hand, carcass weights in the latest USDA report for the week of May 9th show a large 7-lb. drop for steers and 10 lb. lighter on the heifers. This suggests currentness has picked up in the fed-cattle sector.
Packers have had an appetite to keep daily processing levels quite high with 680K head of all federally inspected slaughter. That resulted in
534K head of fed steers and heifers, the largest this year by 14,000 head. Last week’s much smaller production was only due to the holiday weekend that limited the Saturday business to just 18K head. The slaughter pace has been very strong lately with two 99K-head days of fed cattle within two weeks, the largest we’ve seen since the pandemic onset and packing sector slowdown.
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