By Joanna Levin
AMERICAN cattle prices slumped last week after packers proved unwilling to dig deeper into their pockets for finished cattle.
Following a week of daily losses on the Chicago exchange all last week, feeder cattle steadied on Monday (11 May), thanks to weaker corn prices. The Chicago May feeder cattle contract closed at 75.72¢/lb, up 0.20¢ from Friday, 8 May at 75.52¢/lb but still down 1.48¢ on the week.
The weekly slaughter rate of 703,000 head was the highest since the second week of January and some analysts see this is a bullish sign for the near future. They say that packers have probably processed a large part of their live inventory and will therefore be back in the market shortly and ready to pay up.
But other commentators disagree, expecting packers bids to drop to 64¢/lb in the week, which could help account for the weakness in the futures market.
Meanwhile, beef cut-out prices extended their gains early in the week thanks to seasonal demand, but then drifted back on Friday (8 May). The choice grade cut-out on a 550-700lb animal closed at 103.5¢/lb, up from 102.8¢/lb from a week earlier.