The U.S. beef market experienced fundamental developments last week, as reported by experts. According to these reports, the estimated average wholesale value of cuts (Cutout) reached a record high of $310.73. In addition, cash trade in the North began steady, averaging $178.87 for live steer sales, as reported by the USDA. The CME Cattle Futures market has responded to all of this by trading higher. However, the industry is currently focused on time and price, trying to assess how low low cash price can drop on feedlot-finished, slaughter-ready cattle (fed cattle) before June.
One of the biggest challenges facing the industry is limited boxed beef product availability, which has pushed prices higher. This has made it more difficult for packers to keep margins in the black. In addition, there are reports that at least one major plant will be dark for a day or two next week due to the tight supply of fed cattle.
In summary, the U.S. beef market is experiencing record high prices due to limited product availability. The industry's focus is on time and price, trying to determine how much cash fed cattle prices can break before June is too cheap. The market is expected to remain volatile in the short term as packers try to extract more value and the industry waits for more fed cattle to become available in mid-May and June.
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