Post by Glenn on Feb 22, 2011 10:22:17 GMT -6
FEBRUARY 22, 2011
MARKET REPORT AND ANALYSIS
The Tuesday trading session in cattle began Monday night at 5 pm. Cattle futures were stronger in the front months and weaker in the deferreds. Political unrest in the mideast is not directly related to beef but certain will be reflected in oil prices that jumped $4 yesterday.
There was a time when a sale of fed cattle at $110 resulted in windfall profits, but not now. $110 is barely a breakeven for feeders plagued with runaway grain prices. Show list were moderate to smaller as most cattle await the expiration of the February contract. The week’s cattle slaughter was an estimated 651,000 head (versus 622,259 head last year).
Retailers are also looking at the $4 premium in the April live cattle and began this week by moving into the boxed beef market to increase inventory. Boxed beef prices were almost $2 higher in early week trading. Choice was quoted at $169 and select at $168 for a one dollar spread. This is the weakest period of the year for beef demand.
Auction markets continued to feature sharply higher prices. The already short supply of feeders is about to get shorter. Stocker calves, spurred by warmer weather were $5 higher. Many feeding operations are looking at sharply curtailed procurement. Current prices for 750# steers on the southern plains are $130.
Corn prices weakened in overnight trading. Corn will be competing for spring acres with other crops that also have pushed to new contract highs. Traders will watch seed sales as an early leading indicator of the magnitude of increases in corn acreage. Grain companies are making basis offers at 25 cents over March corn. Corn is now pricing into most rations at $12.75 cwt..
MARKET REPORT AND ANALYSIS
The Tuesday trading session in cattle began Monday night at 5 pm. Cattle futures were stronger in the front months and weaker in the deferreds. Political unrest in the mideast is not directly related to beef but certain will be reflected in oil prices that jumped $4 yesterday.
There was a time when a sale of fed cattle at $110 resulted in windfall profits, but not now. $110 is barely a breakeven for feeders plagued with runaway grain prices. Show list were moderate to smaller as most cattle await the expiration of the February contract. The week’s cattle slaughter was an estimated 651,000 head (versus 622,259 head last year).
Retailers are also looking at the $4 premium in the April live cattle and began this week by moving into the boxed beef market to increase inventory. Boxed beef prices were almost $2 higher in early week trading. Choice was quoted at $169 and select at $168 for a one dollar spread. This is the weakest period of the year for beef demand.
Auction markets continued to feature sharply higher prices. The already short supply of feeders is about to get shorter. Stocker calves, spurred by warmer weather were $5 higher. Many feeding operations are looking at sharply curtailed procurement. Current prices for 750# steers on the southern plains are $130.
Corn prices weakened in overnight trading. Corn will be competing for spring acres with other crops that also have pushed to new contract highs. Traders will watch seed sales as an early leading indicator of the magnitude of increases in corn acreage. Grain companies are making basis offers at 25 cents over March corn. Corn is now pricing into most rations at $12.75 cwt..