Last Friday's Cattle on Feed report suggests less than anticipated marketing's took place last month as USDA showed them as 92% compared to the trade average estimate of 95.1%. If there was a surprise in the Mid-year inventory report it is the fact liquidation of beef heifers for replacement was not as hard as expected. This suggests cattlemen are not as pessimistic on beef prices as the spec trade was leading up to the release of the report. Cash cattle trade was quiet last Friday where sales in Texas and Oklahoma were mostly $95 per hundredweight on a live basis versus $94.50 earlier in the week, a small victory for the cattlemen. Working against cash trade is the extremely weak boxed beef cutout values.
In Monday's trade August live cattle futures reached a low of 9685, a level last experienced on April 15. Their remains a chart gap between the April 14 high 9640 and the April 15 low of 9680. The spec trade took last Friday's bearish cattle on feed report to heart by pressing futures to a gap open lower from Friday's low of 9765 to Monday's high of 9735. Immediate technical resistance is 9790. Box beef prices continued its three-day decent lower on Monday but expectations are calling for a nearby bottom potentially supporting futures.
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