Beef prices ran out of steam and began to fall last week, pulling cash prices lower as packer bids were not as active on shrinking margins.
Cash trade early in the week continued its rally as cattle in the U.S. Plains topped $150 early in the week on tight supplies. Eventually falling beef prices dragged cash trade lower with northern markets down $4 for the week. Wholesale choice beef prices fell $14.55 per hundredweight last week, settling at $223.49. The drop in beef prices led packers to bid lower for slaughter-ready cattle as prices sank.
Our panel of experts predicts the trend lower in the cash market to continue this week, forecasting a decline of $1.99 per hundredweight. The Monday Market Sentiment expects the 5-Area cash trade to average $143.39 per hundredweight.
The Monday Market Sentiment is a forecast of the upcoming weekly cash trade (5-Area weighted average price) prices reported by the USDA. Last week’s average price ended a five-week rally as cash trade moved $3.02 lower in the week ending January 31.
Although our panel expected cash trade to fall, the forecast called for a decrease of $1.15 per hundredweight. The Monday Market Sentiment panel did not foresee such steep losses in beef prices which continued this week as choice boxed beef prices were down another $3.40 on Monday.
The trend lower in the beef market pushed packer margins back into the red, falling from $68.45 per head last Monday to negative $46.35 per head early this week.
Each week the Cattle Trader Center, on behalf of Vance Publishing, awards a $100 gift certificate from Cabela's to the industry leader whose forecast comes closest to the 5-Area cash trade number reported by the USDA. The most recent winner was Scott Keeling, Keeling Feeders.