By Cassie Fish, CassandraFish.com
CME cattle futures have lost ground all day after a couple of positive back-to-back performances. Sure, the market backing off from yesterday’s high was a tip off, nonetheless, the leaking-lower action today has deflated hopes that CME cattle futures have lost ground all day after a couple of positive back-to-back performances. Sure, the market a corner had once again been turned.
Packer bids are still scarce and not budging above $131. Most packers seem to be out of the market and seller confidence is being undermined by the futures market action. At this juncture, trade may not occur until late this afternoon. There is still plenty of finger pointing toward some remaining still-big cattle in the Corn Belt going on even though steer weights dropped a couple of weeks ago 7 pounds.
Boxes are struggling and even though another upswing is expected in late November/early December, today it is sluggish to put it mildly. The difference between cattle costs in the north versus the south still put southern plants a little in the red and hours are being adjusted regionally. This week’s kill is expected to come in at 551-555k compared with last week’s 563k unless the Saturday kill ends up bigger than thought. There is already talk that Thanksgiving week’s kill will be minimal, even for a holiday.
As futures once again post triple digit loses today, many are eyeing the clock, fatigued by the volatility now so commonplace and wishing this week was history.
If winter weather develops and/or another seasonally-expected rally in boxes come to pass, it would seem a run at the 40-day moving averages overhead is still possible. If not, more struggle seems in store. The 10-day moving average stopped yesterday’s rally dead in its tracks.
There will be an improvement in retail interest in beef after the turkeys move out, but retailers are spoiled for cheap competitive protein choices and in general, continue to resist lowering prices dramatically enough to reinvigorate consumer buying. Too bad the transparency that exists from cheap crude to cheap gas at the pump doesn’t exist for beef, otherwise everyone would have a big pot of chili on the stove this weekend having loaded the grocery cart with $2.25/pound ground beef
