By Joanna Levin
SOFTER beef product prices have led the US cattle market lower in recent trading. As buying tailed off ahead of last weeks Memorial Day weekend, the choice grade cut-out for 550-700lb animals closed at 101.72¢/lb, down from 102.47¢ a week earlier.
The cut-out grade lost nearly another cent as trading resumed after the long weekend. In comparison the cash market for live cattle remained fairly stable with packers bids at 63¢/lb yesterday (Wednesday), unchanged from a week ago.
But Chicago futures fell abruptly, dragged lower by the drop in prices for beef products after a quiet few days of sideways trading. Even the recent weakness in corn prices failed to stimulate the feeder cattle market. The Chicago August feeder cattle contract closed yesterday (Wednesday) at 75.50¢/lb, down 0.82¢ from Tuesday and down about half a cent on the week.
While the beef and live cattle markets are experiencing seasonal fluctuations in response to holiday demand, the overall trend for US cattle remains downwards due to oversupply.
Even though US beef exports were up 13,742 metric tonnes or 9% during the first quarter, this was more than offset by a 19% jump in US imports during the same period as Australia and New Zealand rushed to export beef to the US in response to the strong US dollar.