Market fallout from this week’s confirmation of America’s fourth BSE case appears to be minimal. Boxed beef prices posted gains on Wednesday, with the Choice cutout at $190.67, up $0.73 from Tuesday. Select cutout was reported at $188.05, up $0.84 from the previous day.
Packer interest in fed cattle was moderate, and reported sales were too light for an adequate test. A few cattle sold in Kansas at $119 per hundredweight, and a few in Nebraska at $120. If those prices hold, the market would be down $4 to $5 from the previous week. But cattle feeders were said to be pricing cattle steady with last week.
Futures prices on Wednesday, however, rebounded from Tuesday’s limit down performance. Live cattle futures were lifted by short-covering, higher boxed beef prices, and assurances by Japan, Mexico and Canada that imports of U.S. beef would not be affected by this week’s BSE news.
"You've got some people saying yesterday's action was overblown. The cutout was strong and futures are at a steep discount to cash which are the other supportive factors," Jim Clarkson with A&A Trading told Reuters.
Early week performance of cattle futures also raised questions about what traders knew regarding the BSE report. It was widely reported that a rumor circulated the cattle pits before the close on Tuesday, driving contracts limit down for the day. A few others have speculated that some traders had heard the BSE rumor as early as Monday, and that the downward trend started then.
Market analysts also note that the finding of another BSE-infected cow should not affect the markets at all, especially since none of the four infected cows discovered in the U.S. over the past decade have come close to the food supply.
After the BSE news this week, “the market became extremely oversold,” Joe Ocrant, president of Oak Investment Group Ocrant told Reuters. “And as assurances come in from USDA that this is an isolated incident and the meat did not enter the food chain, traders will start to forget about it."
Comments (0) Leave a comment