Cattle prices exploded this week, rebounding from a six-year low. Prices rose by more than 5.5 cents per pound, “locking limit up” at one point on Thursday, as the market moved the daily maximum of 3 cents per pound.
The market was especially active Friday after the market resumed trading as ranchers, meatpackers, and traders positioned themselves ahead of the USDA’s monthly Cattle on Feed Report, which was released after the market closed.
Cheap boneless beef is catching consumers’ eyes, and retailers are reporting that they are moving inventory at an increasing pace. This boosted demand gives credence to the adage that “low prices cure low prices.”
Despite this week’s jump, cattle prices are still abysmally low for producers, and wondrously cheap for shoppers, with live cattle trading Friday near $1.02 per pound.
Demand Boosts Prices for Corn
Corn prices rose this week, despite the ongoing record-large harvest and large carry-over from last years’ crop. The market gained as strong domestic demand and big buying from foreign countries have helped cut into supplies, giving hope that farmers can avoid the disastrously low prices seen back in August.
Since then, prices have risen from $3.15 to Friday’s level of $3.53 per bushel.
As farmers near the end of the corn harvest, they now can rest a little easier, knowing that this year’s hard work is worth a bit more money.
Dollar Strong, Euro Weak
The euro currency fell to its lowest level since February after the European Central Bank President stated that the ECB would likely continue its massive monetary stimulus.
Similar to the tactics employed by our own Federal Reserve, the ECB is trying to stimulate the European economy by driving interest rates lower, making borrowing less expensive. While this may help their economy, low interest rates also make the low-yielding euro less attractive to investors.
Meanwhile, the US Fed is increasingly expected to raise interest rates again this year, which is boosting the value of the US Dollar. The greenback’s rise could eventually restrict our exports, as a higher dollar makes US products more expensive to foreign buyers, a trend that could hurt US farmers looking to sell their grains and meat on the international market.