By Joanna Levin
CATTLE prices have soared by at least 5% over the past couple of weeks, recovering all the losses registered since early August.
This sudden climb is good news for producers of store cattle and live (slaughter) cattle who have been suffering negative margins for months. Market analysts suggest that the surge in the beef market is a belated reaction to cheaper grain prices, as well as to the excessive sell-off witnessed in August.
The driving force behind the rally has been a recovery in the cash price paid by packing houses. Cash values have risen to 58.00-60.00¢/lb (34.5-35.5p/lb), up from 56.00¢ a fortnight ago. Slaughterers are in a position to pay up from live animals due to the rally in beef cut-out values. The light choice grade beef cut-out hit a low of 97.5¢/lb early last week, but climbed to over 101¢/lb early this week.
On the Chicago Mercantile Exchange, the October live cattle futures price settled on Wednesday 16 September at 61.45¢/lb, down 6.7¢ from the previous day but up from a close of just below 60¢/lb last week, and a low of 57.5 ¢/lb touched in intraday trading two weeks ago.
The October store cattle contract has followed a similar path, losing 3.8¢/Ib to 69.62¢/Ib on Wednesday but rallying from 66.25¢/Ib at the start of September.