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New Mexico | beef cut outs end of this week ( right at $162.50 cwt ).
That buys plenty of time for the various components of the system to posture for yet higher cattle prices in 2 weeks.
Also means the coming week will likely be steady or make back the $1.25 setback on live cattle from last weeks highs.
Cattle are up approx $18 cwt since just before the xmas storm 09.
Bulk of this deal IS export driven ( that's the new Normal, btw ).
Jan 010 exports are just under Jan 08 which was the previous high Jan record.
Last half of 09 exports btw, WAS a 6 month record ( surpassed last half of 08 ).
Looks to be a long term head and shoulders type scenario:
Long term Shoulders should be the $105 to $115 range, Heads perhaps winter of 010 thru summer 011 in the $118 to $138 range.
Interesting thing is from the feeder cattle side:
Numbers available from Mexico are low ( record low ) and with foriegn competition for em too ( some that normally go to usa are perhaps destined elsewhere ).
AND the usa Holstien feeder supply is lower too ( couple reasons for this, less cows and sexed semen ).
The afore 2 factors are what in fact used to be the USA's feeder cattle supply in reserve so to speak. That no longer appears to be possible.
Less beef calves this year due to weather and less cow numbers.
Looks like beef supplies will be much shorter in 011 than they are currently.
Granted the usa is much like the Argentine model which may contemplate limiting beef exports and freezing beef prices domestically depending on how this deal gets spun ( at what levels...who knows? but that is the ONLY downside to the beef complex ).
Edited by Markwright 3/27/2010 18:00
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Right at an $8 UP in
