Cattle markets were slow last week. Fed cattle traded in the Southern Plains at $121 live and $198 dressed. Northern feeders were trading between $123-126. Packers weren’t showing much interest in securing more cattle. As Labor Day weekend approaches, packers should be expanding kill levels especially with boxed beef prices moving higher. August live cattle futures gained 20 cents to close at $123.15.
“Live cattle futures remain sluggish with prices mixed in a very narrow range,” said Rick Kment at DTN. “Concerns of stable cash values may once again offset support in beef values and keep futures traders looking for additional incentive to step back into the market.”
Slaughter levels have been disappointing. As of last Thursday, 462,000 head were processed for the week, which is 18,000 lower than the week prior. Apparently one plant had a flood and stopped production for a while. Packers have been having a hard time taking slaughter levels over 650,000 head per week.
Wholesale beef markets have been on fire and have exceeded everyone’s expectations going into Labor Day. The Choice cutout was at $317.93 and Select was at $290.31. The week before it was $292. The current Choice-Select spread is $27.62. It’s remarkable that 85 percent of the fed beef is grading Choice and Prime. The ground beef market is at a high point with 90 percent lean trading at $279.76 and 50 percent lean at $163.72. Packers should be earning record margins again.
Cassie Fish at The Beef points out, “Of course with boxes screaming higher, packer margins could easily pay up and still book record margins. However, packer competition this week has generally been very muted and one major packer has hardly participated. The late July and early August boxed beef price rally has exceeded all expectations and historical precedent. Prices are as high as they were in June.”
Feeder cattle markets were more exciting as prices continue to move higher. USDA’s August crop report did make futures markets a little uneasy. The report revised their yield estimates down 4.9 bushels per acre from the July report. However, they estimate the total corn crop will be 4 percent higher. Feeder cattle futures had a mild reaction with August feeders down 7 cents to $158.70. September gained 72 cents to $163.55 and October was up 32 cents to $165.62. The latest CME Feeder Cattle Index was at $156.25.
Colorado: Winter Livestock Auction in La Junta reported, compared with last Monday: Calves were uneven; steers under 450 lbs. were steady to $2 higher, 450 to 500 lbs. were $3-5 higher, 500 to 700 lbs. were steady to $3 lower, and over 700 lbs. were $5-8 higher. Heifer calves under 500 lbs. were steady to $3 lower, 500 to 600 lbs. $3-5 higher, 600 to 700 lbs. steady to $2 lower, and over 700 lbs. were $3 higher. Demand was good. Benchmark steers weighing 759 lbs. averaged $137.62.
Nebraska: Bassett Livestock Auction sold 4,560 head, and reported no recent test of market for an accurate comparison for steers, heifers or replacement cattle. In addition to regular local consignments, out-of-state cattle were selling today due to dry conditions and fire. Demand was good with several buyers. Warmer weather in the area. Benchmark steers weighing 848 lbs. averaged $168.87.
Montana: Pays Livestock Auction, Billings sold 2,546 head and reported, compared to last sale July 28: Yearling steers were too lightly tested last sale to develop an accurate market trend, however higher undertones were noticed. Steer calves sold $12-$15 higher in a narrow comparison. Yearling heifers under 800 lbs. sold fully steady in a narrow comparison. Heifers over 800 lbs. sold mostly steady to $3 higher. Heifer calves sold mostly $13-19 higher than two weeks ago. Quality this week was average to attractive. Many sets of replacement heifers were seen this week and consigners offered to abort these heifers at their expense if they were purchased to feed. Only one set of heifers was retained as replacements this week. Demand was mostly good for all yearlings on offer while calves sold on mostly moderate demand. Market activity this week was mostly active. Weigh-up cows sold on light to moderate demand for heavy offerings. Benchmark steers weighing 779 lbs. averaged $156.47.
California: Orland Livestock Auction appeared to be having a good sale last Thursday. Yearling steers weighing 745 lbs. sold for $152.74 and heifers weighing 698 lbs. sold for $144. Drought conditions were forcing some early weaning and steers weighing 348 lbs. sold for $185, some 424-lb. steers brought $177 and heifers weighing 333 lbs. sold for $170. — Pete Crow, WLJ Publisher
