Certified Angus Beef Insider Market Update

 

Oklahoma Farm Report

15 Jun 2022

 

Volatility in futures contract prices is a common theme in the modern era, but this past week was particularly exaggerated. The June Live Cattle contract leaped $2.45/cwt. higher last Wednesday to close at $136.85/cwt., close to the prior week's cash fed cattle weighted average price.

 

Thursday held the prior day's gains and the cash fed cattle trade capitalized on the positivity, generating a $3/cwt. increase for the week, with the weighted steer price averaging $140/cwt.

 

June 13's incredibly bearish day in the equities markets spilled negatively to commodities, pressuring June Live Cattle right back down to close at $134/cwt. This week's early cash trade has shrugged off any negativity with fundamental demand taking over. Confirmed sales in the north are sharply higher from $144 to $149/cwt. while southern packer bids trail much farther behind at $138/cwt. so far.

 

The quick uptick in price signals that market-ready fed cattle are fairly tight in the country. As well, the premium in the northern feeding region remains indicative of the quality-starved market in the short term.

 

Excessive heat is the theme this week, with several days in a row of temperatures near and above 100 degrees across several latitudes in cattle feeding country. High costs of gain in the feedyard do not pair well with sultry temperatures, halting efficiency. The weather will have cattle feeders building a fairly deep show list for their negotiated sales this week.

   

The boxed beef trade last week saw firmer prices with the CAB cutout increasing $3.67/cwt., Choice up $2.55/cwt. and Select up just $0.98/cwt. In the past 10 years, the CAB cutout increased from May into the first week of June just four times and further price hikes into the second full week just three times. The 10-year average trend beginning in early June shows a 10% price decline through late July before boxed values reverse and move higher again.

   

On a cut-by-cut basis across the beef carcass it was the short loins that hoisted the largest price increase last week. In preparation for Father's Day (think "T-Bones") the short loin price has increased 10% in two weeks. Not far behind and sourced from the same exact point on the carcass, strip loins are charting a perfect seasonal price pattern, looking for their June wholesale price high most recently at $8.83/lb., up 9% in four weeks.

 

Rounding out some of the additional price-surge highlights last week were the thin meats, such as flanks and inside skirts as well at tri-tips. In sum total, the chuck primal posted big gains but incrementally for each individual cut.

 

PRIME PREMIUM REFLECTION ...

 

more, including table

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