Short covering and position squaring seemed to be key drivers behind the surge in Cattle Futures on Tuesday. At least it offers a modicum of hope for cash fed cattle trade this week.
Choice boxed beef cutout value was 6¢ lower Tuesday afternoon at $193.03/cwt. Select was 73¢ lower at $190.89.
After 72¢ higher in spot Aug, Live Cattle futures closed an average of $1.59 higher ($1.20 to $2.02 higher).
Feeder Cattle futures closed an average of $2.47 higher ($2.15 to $2.90 higher).
******************************
Major U.S. financial indices blasted higher on Tuesday, with many analysts attributing the surge to renewed hopes for tax reform. Presumably, the optimism is based on reports that the Trump administration and pivotal legislators agree on a path forward.
The Dow Jones Industrial Average closed 196 points higher. The S&P 500 closed 24 points higher. The NASDAQ closed 84 points higher.
******************************
If the monthly Cold Storage report released by USDA is any indication of market clearing, then beef supplies continue to be in relatively strong fundamental shape.
Total pounds of beef in freezers Jul. 31 were 4% more than the previous month but 8% less than a year earlier. At the same time last year, beef in cold storage was 3% higher than the previous month but 2% less than the previous year,
Frozen pork supplies were down 1% from the previous month and down 7% from last year.
Total red meat supplies in freezers were up 1% from the previous month but down 8% from last year.
Total frozen poultry supplies were up 1% from the previous month and up 2% from a year ago.