The cattle market saw a strong turn around yesterday with June cattle gaining $2, finishing at $106.225. The sense of a break being overdone, along with a record packer margin helping to stabilize the cash market is what seems to have been the catalyst to help spark the turnaround in futures. December cattle tried to break through the $99 level, but failed to do so and had a strong turn around to the upside. There were more rumors coming out of China that they will extend an olive branch by lifting tariffs on agriculture products which also helped spark the buying in the market. The June contract is at a resistance level right now, but if there is no negative news for the rest of the week, I suspect this market to have some follow through today and try to fill the gap the rest of this week into next. If we trade above the August 22nd high of $106.775, I would see this as confirmation as a turnaround in the beef market. The USDA estimated cattle slaughter came in at 116,000 head yesterday. This brings the total for the week so far to 231,000 head, up from 116,000 last week (which was shortened by the holiday on Monday) and down from 239,000 a year ago. USDA boxed beef cutout values were down 63 cents at mid-session yesterday and closed $1.57 lower at $225.38. This was down from $230.66 the previous week. Only a small amount of cattle traded in the cash market Monday but at lower prices than last week, with Iowa/Minnesota at $97.00 and some cattle in Nebraska at $97.00 as well. Nebraska traded as high as $109.50 back on August 22nd.
