What was feared, came to fruition for live cattle with cash generally $2.00 lower Wednesday. Slower processing speeds leave packers less aggressive at a time when feedlots need to move cattle. Hog futures did an about face as the market corrected from the selling phase.
Cattle: Lower. Futures: Lower. Live Equiv: $209.63 +$1.41*
Hogs: Lower. Futures: Mixed. Lean Equiv: $91.35 +$2.84**
*Based on formula estimating live cattle equivalent of gross packer revenue. (The Live Cattle Equiv. Index has been updated to depict recent changes in live cattle weights and grading percentages.)
** based on formula estimating lean hog equivalent of gross packer revenue
Feedlots decided to accept the bids established by packers rather than wait until later in the week in the hopes that those bids might be raised. With slower slaughter speeds, packers may have a limit of how many they would purchase, and feedlots did not want to miss being able to sell some cattle and then feed them again another week only to potentially see still lower cash. This will be an issue for some weeks to come as it will take time to increase processing ability and bring marketings current again.
Boxed beef closed higher with choice up $1.71 and select up $2.35. There are again reports of store shelves being depleted or empty of items due to current supply chain issues with meat being one of them. That is the reason boxed beef continues to increase. Weekly export sales will need to make up for last week and then some to provide market support.