By Joanna Newman
ITS been another strong week for US cattle and beef prices.
Feeder (store) cattle futures have surged to their highest level in three months, with the Chicago August contract up at 75.9¢/lb (103.6p/kg) on Tuesday (2 June), compared with 74.6¢ a week ago.
Feeder values have been helped by the continuing weakness in maize and wheat.
The lighter cattle tend to move in inverse relation to their cost of weight gain, as represented by feed grains.
Meanwhile, packing houses are paying up for live animals – about 66¢/lb (90p/kg) in recent trades – and have also been willing to accept lighter finished cattle.
Lighter slaughter weights are widely seen as a bullish indicator of tightening supply.
Producers are following this trend closely in the wake of last weeks disappointing cattle on feed report by the US Department of Agriculture, which pointed to a larger-than-expected herd in the nations feedlots.
Meanwhile the markets strong rally is being helped by good retail demand.
The Memorial Day holiday last weekend helped push up beef prices to their highest level in two years.
However, pork is rapidly becoming more competitive with beef. Pig prices enter freefall and this could damage beefs share of the American protein dollar in coming weeks.
Feeder cattle futures prices are up about 6% since the start of the month, while pig values have plummeted 13% during the same brief period.