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Volume 10 Number 33Based on
several sources, it should be considered informational only.
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Beef: In a study of
contrasts, beef prices are soft at the same the futures market continues to
point towards record high levels. There is doubt among market analysts that such
future prices will be obtainable based on current demand levels. Short-term
trends are pointing towards $104/cwt cattle in October and $106/cwt cattle by
December. Mathematically speaking, it would take a choice cutout value of
approximately $175/cwt in October and nearly $180.cwt in December to support
cattle prices indicated by futures pricing. This is not likely based upon
current and expected domestic demand.
While many expect trade to move higher over the next few weeks, the degree of
these gains will be determined by renewed strength in the wholesale beef market.
Sluggish middle meat prices continue to weigh on cutout values. The blended
cutout fell another $1/cwt last week. Both chuck and round meats are expected to
see declines on the horizon, particularly with a strengthening U.S. dollar
bearish to the export market. If we do not see an increase in demand for ribs
and tenderloins—which are most typically domestic items -- cutout values will
not see the large gains that many expect.
This is a market that clearly is trying to advance but cannot get the traction
the packers are praying for.
Veal: Steady. This has been the situation for most of the summer. Packers
continue to explore wider entry into retail as foodservice is only focused on
limited cuts.
Lamb: Domestic market is steady. The predictions of higher costs for
imported lamb are coming true. Australian product is jumping in price as new
shipments arrive in the U.S. This once steady source is now starting to close
the gap between domestic and imported pricing.
Pork: Butts have declined heavily over the past few weeks. As of the
other day, pork butts have fallen over 15% from their high for the year, which
was only three weeks ago. This is a trend that is likely to continue over the
next couple months. Seasonal pressures point downward for pork butt prices until
early November. With pork supplies abundant, if exports decline as many expect,
prices have the potential to fall much further than this. A booming export
sector has kept the floor underneath pork prices for some time. While a fall to
last year’s low levels is unlikely without a major drop in foreign demand, a
fall to at least 2006 prices seems probable.
Chicken: After sliding a bit over the past couple of weeks, breast meat
prices have flattened out.
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