Cattle Prices Moving Up this Week
Chicago—After a new low last week in the futures market, live cattle futures were much higher on Wednesday with help from improved wholesale beef prices according to traders on the Mercantile exchange.
“I think the market is where it should be,” said Cameron Mulrony of the Idaho Cattle Association. “This summer the seasonal dip we usually see in August happened earlier and it took away any price momentum we’d normally see heading into Labor Day weekend. Hopefully we’ll see increases like we’ve seen today but there is still a lot of speculation at this point in the cattle market and those low prices.”
December futures got added support from buyers after the contract topped the 10-day moving average of 109.648 cents. October live cattle finished up 0.275 cents per pound at 104.700 cents, and December closed 0.425 cent higher at 109.800 cents.
According to the Mercantile exchange, Some grocers bought beef to avoid shortages after plants closed on Monday for the US Labor Day holiday, and that spiked prices.
Mulrony says the beef demand softens after Labor Day because it’s the last big BBQ holiday of the summer and shoppers buy more back to school-type food.
“We’re not overly concerned right now, prices will come back. Beef is the best protein in the world and people enjoy a good steak. We know that demand is still there and in the meantime we’ll continue to improve our market,” said Mulrony.
Rancher Kyle Wade out of Downey is holding on his cattle until prices improve.
“I’m holding on right now just trying to stay pat right now. I might have the opportunity to buy a few more cows. I’ve looked down that avenue and waiting seems the right thing to do until prices get back to where they were in the spring,” said Wade.
Allendale Market strategist Rich Nelson says that buyers may want to see if cash prices can stabilize before making any further moves on the futures end of the market.
Cattle buyers waited until Tuesday’s sale of market-ready cattle in the US to buy and the market fetched $103 to $105 per hundred weight. Bullish traders think packers will pay at least $105 per cwt for supplies with better wholesale beef prices and higher profit margins for packers.
Low prices are expected at this time of year at any auction yard in America. But Wade knows things will turn around and he’ll wait for the best time to sell.
“There’s a lot of promise in the future. As of right now we have seen a little dip in the past two weeks or a month with cattle prices as well as meat prices but there could be a good future in the long run. Hopefully, we’ll see that sooner than later,” said Wade.
Skeptical market players say too many slaughter cattle at heavier weight means more meat in the retail sector and that means weak prices. But on Wednesday technical buying and live cattle futures advances pulled up the feeder cattle contracts. Wednesday closed at 1.250 cents per pound higher at 143.300 cents.
“I’ll sell all of my calves by November. We come off our range in November and we try and sell that first two weeks after we are home. So I think prices will be better by then. With hurricane Harvey recovery and the opening of the Chinese market, I think there will be pressure on the futures market to move prices up. There’s another storm off the Atlantic and I think the future for beef is bright, but right now we’re holding on,” said Wade.