Week of August 08, 2026
The Week
Last week we called the flat week a pause, not a bottom. It was a bottom. Strip loin and short loin have both climbed two weeks running, and the belly call we published at 189 cents now prints 202. What changed underneath is grade: the Choice to Select spread gave up half its width in three sessions.
Supply Picture
The packer's position improved and is still bad. The cattle-cutout spread came back to $159 a head from $116 last week, against the same kill-and-cut cost. That is a smaller loss, not a profit, and it is the first move in the packer's favour in three weeks.
The kill held near 526,000 head. The year-ago gap we put at 8% last week has narrowed to about 5%, which says packers are not cutting shifts yet despite the red ink. Heavier steers are still doing the rest of the work on tonnage.
On the border, the news is the disease, not the date. The Texas quarantine zone grew to 23 counties and FDA cleared an emergency wound spray for screwworm. August 24 still stands and still does nothing for this year's kill. Any fresh case that pushes the date makes 2027 tighter than the market is pricing.
Demand Situation
Grade went the other way hard. The Choice to Select spread printed 23 cents Tuesday and 12 cents Friday. Last week it was widening. This week buyers quit paying up for Choice inside three sessions, and until that rebuilds the middles have nothing underneath them.
The middles took the repricing. Strip loin is down 18% over four weeks to $9.12/lb and short loin 19% to $7.61. Back to prices that make sense for August, and both have ticked higher two weeks running. The fall came early in that window; the turn came late.
We called hold on strip twice on the way down and were wrong both times, then called the flat week a pause. It was the bottom.
Ribeye did not join them. Choice boneless light is down only 2.4% in four weeks and now sits 31% above its normal August price, wider than the 27% we cited last week. Rib is the one middle that has not repriced at all, and it is getting more expensive against the season, not less.
Ground 81% is down 15% over four weeks to $3.56/lb. The lean side has done most of its correcting.
Pork Market
Last week's call was bellies at 189 cents. They print 202 and are still climbing, so that one is working. It is also most of the way done: bellies are no longer cheap for the season and the discount that made the call obvious has been halved.
The cheap end of pork has rotated to hams and trim. Pork packers sit on breakeven, somewhere between negative $4 and positive $4 a head, and lean hog futures fell about 3.4% this week while cash stayed flat. That gap between futures and cash is the thing to watch into September.
Summary
The loins are the buy. They have repriced, the turn is two weeks old, and Labor Day is still in front of us. Rib is the opposite trade: it never came down and its premium is widening, so cover the minimum and wait it out. On bellies, take the win and stop adding.
The risk is grade. If Choice to Select stays down where it printed Friday, the loin bounce loses its support and we are early again.
This week's call: strip loin is higher two weeks from now than the $9.12 it printed Friday.