By Joanna Levin
THE US beef complex has seen dramatic price swings in recent days, rallying at the end of August before plummeting again at the start of September.
Despite this volatility, the market remains depressed overall and current cash and futures values represent a substantial loss for US producers.
The collapse in the maize market, which has made it cheaper for cattle owners to fatten their herd, has failed to restore margins for cattle producers. Analysts blame the weakness in the hog market, uncertainty in global financial markets and structural oversupply.
The Chicago September store cattle futures contract settled on Tuesday 1 September at 67.45/lb, down 0.32 from the previous day and down from 68.25/lb late last week. While this represents an improvement on the low of 66.25/lb touched during trading on Wednesday 26 August, the market is still well below the 79 level seen in April.
The live cattle market has followed a similar pattern. The Chicago October live cattle contract settled on Tuesday 1 September at 59.00/lb, unchanged from the previous day and down from 61.25/lb during trading at the end of the week before. The cash prices paid by packers have fallen from 59/lb in recent weeks to around 57/lb currently and most analysts see little good news to stimulate a rally in the cash or futures market in the year term.