By Joanna Levin
STORE cattle prices, which rallied by about 8% during the first half of September, have given up half of their gains over recent days.
The Chicago October store cattle contract settled on Tuesday, 29 September at 68.45¢/lb, down from 69.47¢ in the previous week and falling from a peak of 71.25¢/lb earlier in the month.
Meanwhile the October contract for finished cattle followed a similar pattern. The contract closed at 59.5¢/lb on 29 September, compared with 62.5¢/lb two weeks earlier.
The value for producers has been dragged down by the lower prices paid for live animals by the packing houses. The slaughter value for live cattle in the cash market has dropped to 58¢/lb, down 1¢ on last week and falling from 60¢ two weeks ago.
Overall, the market continues to suffer from a vicious circle of oversupply due to the poor prices. This has discouraged producers from selling their herds. Following the recent weakness, prices are down about 15% from early May.
Some analysts express optimism that a drop in maize prices will trigger an inverse rally in cattle values. However, the collapse in the grain markets over the summer failed to stimulate beef values.