Packers upped their bids well before happy hour Friday, buying cattle from $114 to $116 live and $181 to $182 dressed, steady to $2 higher than last week. Southern cattle sold mostly at $114, with a few trading late at $115, $2 to $3 higher.
Analysts call the underlying fundamentals strong with daily evidence of strengthening beef demand.
“Attractive boxed-beef values and large packer margins continue to help support higher fed cattle prices, also giving great incentives for packers to push capacity levels to take advantage of their margins,” AMS reporters said. “Boxed-beef cutouts continue to surge higher as beef demand remains very good with beef, especially choice product being featured in retail ads consistently even as Thanksgiving approaches.”
For the week, the Choice cutout closed $5.92 higher at $239.12, while Select was $5.75 higher at $213.26; putting the Choice-Select spread at $25.86. The Choice cutout is now around 2.50 shy of the most recent high of $241.74 on August 21.
Cattle slaughter under federal inspection was estimated at 651,000 head for the week, 7,000 head less than last week and 2,000 more than last year.
Feeder cattle were called steady to $4 higher, with calves $1 to $4 higher. AMS reporters said the supply of feeders was heavy at auctions this week, with the 360,400 head sold the second largest auction numbers of the year.
“Discounts continue to be applied to calves with short or no weaning programs, but they are not nearly as severe as what was being applied a month ago,” AMS said. “Colder weather is helping to straighten these calves out and make them a little less risky to own. Demand for light weight calves in Montana was reduced caused by dry conditions on the west coast. Transportation issues in the Northern Plains tightened demand late in the week due to limited truck availability.”
AMS said loads of yearling have been met with very good demand.
“Being able to hedge off the April CME Live Cattle contract is huge considering the near $8.00 premium to the June Contract,” AMS said. All contracts in the CME Cattle Complex have risen slowly since the recent lows around the 10th of September. Since then, the December Live Cattle contract is around $20.00 higher, and the January Feeder Cattle contract is almost $19.00 higher.”