By Joanna Levin
FEEDER (store) cattle prices continued to track feed corn (maize) declining as maize rallied – until yesterday (29 June). Now, a collapse in maize prices on news of milder weather has been echoed by a strong recovery in store cattle.
The Chicago August store cattle futures contract closed on Monday 72.45¢/lb, up 1.50¢from Friday and just off the week-earlier level of 72.95¢/lb. The rebound is welcome news for battered owners, who have seen the value of their cattle drop 8% in the past couple of months. With negative margins for finished cattle to the meatpackers, owners are hoping for a further decline in maize prices to bolster both stores and finished cattle.
Meanwhile, wholesale beef prices have dropped ahead of falling retail demand expected after the Independence Day holiday weekend (4-5 July). The light Choice-grade cut-out has fallen abruptly to 100.5¢/lb from 102.1¢/lb a week ago. Retailers are in a strong bargaining position as beef production is running at over 500 million pounds a week, well above average.