Thanksgiving Markets See Wholesale Beef Bounce28 November 2013
US – Thanksgiving’s market impact and particularly late arrival this year could be supporting wholesale beef prices.
Monday night saw wholesale beef prices bounce $2.4/cwt and select cut-out close up $1.46/cwt, which in turn could give December live cattle some support, say CME analysts.
Steve Meyer and Len Steiner say that this bounce was expected, as part of the usual end of November routine.
“The meat case empties of all the turkeys and retailers return briefly to a more balanced mixed, including some traditional cold weather beef items,” said Mr Meyer.
“Also important to remember is that Thanksgiving is particularly late this year. This means there are fewer days between Thanksgiving and Christmas to accumulate inventory and prepare for the holiday rush.”
Being just four weeks away from Christmas means loin primal values have risen, with chucks also lifting 1.5 per cent on the previous close. The last two years have seen chuck fall in early December, normally they find support after Thanksgiving.
Analysts expect slaughter to come in around three per cent lower through quarter four than a year ago. This is currently holding near year ago levels, explains Mr Steiner.
“This runs somewhat counter earlier forecasts for very short supplies but consistent with the pattern of placements in the summer,” said Mr Steiner. “Placements were certainly down in August but they skewed heavy, which meant the marketing window would be front loaded.”
This means supply in early 2014 will be limited.
Slaughter through December is expected to run 3.5-4 per cent below year ago levels. Supply is also thought to be an issue for lean beef supplies, which have been steadies by ‘pipe line supplies’.
“We could see lean beef prices move sharply higher once all the yearend business is concluded,” concluded Mr Steiner.
TheCattleSite News Desk