Bold new year for beef
Live cattle prices jumped after Christmas to $122 as the futures market took a significant turn on Thursday going limit up. This was sparked by open interest as the DOW moved down, traders turned to Live Cattle futures. Packers had worked cash cattle as low as $119 prior to giving up ground and returning to previous trading ranges. Last week, futures moved sideways, however, cash cattle had not traded.
Boxed beef values were up across all grades as packers tried to maintain their margins on higher cattle costs. End cuts continue to be the focus of many buyers looking to book ad features for the coming weeks. CAB chucks and rounds gained 2% and 5%, respectively; rounds set a new all-time high eclipsing $180/cwt.
CAB certification continued to improve at the end of 2011 as it moved from a low point of 17.13% set in late November to 18.85% and then 19.23% in mid-December. This improvement equates to an additional 5,400 head certified when compared to the November low.
Over the late fall weeks, CAB acceptance had been running near a several-year low, which corresponded to a low in % of Choice certified into an upper-2/3rds program by USDA. In mid-December, that number was 20.9% vs. the 2010 average of 25.4%.
Until we meat again,
-David
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