Cattle markets were weaker today with the CME feeder cattle contracts losing a couple of dollars on all contract months. August feeders were down $1.20 to $142.72 and September was down $2.17 to $144.40. The cash markets were trading down a bit as well with both Western Video and Superior Livestock holding big sales this week. Yearling feeders were trading between $138 and $150 and higher if they are program cattle.
ShayLe Stewart at DTN said today, “Feeder cattle contracts are having a battle of the minds Monday morning as the countryside continues to support higher prices but consensus from traders that higher is where the market should aim isn’t as clear. With a big unknown question mark surrounding this year’s feed expenses as pastures continue to deteriorate and Iowa uncertain if their corn is salvageable leaves the market leery of trading higher in nearby contracts.”
Fed cattle also struggled at the CME, with August losing 70 cents to $106.90 and October down 35 cents to $109.87. Cash prices are expected to be a couple dollars higher this week. Slaughter is expected to be around 650,000 head this week. There was no cash trade today, however packers priced 55,500 head on the formula and grid weighing 873 lbs. and averaging $160.91.
Stewart also said, “Cash cattle prices are expected to be higher again this week and if the market is able to capture another week of strong cash cattle trade, the board should benefit from its endurance. Asking prices have yet to be established and with last week’s later trade benefitting feeders the most, feeders may wait to price cattle until later Monday or sometime Tuesday. New show lists appear to be mixed, higher in Nebraska/Colorado, but lower in Kansas and Texas.”
Cassie Fish at The Beef talked about futures markets today. “Technically the market is overbought and has a sense of being stretched. There are a few things occurring that could be signaling a correction is imminent. One is feeder cattle futures losing for live cattle futures as of late and overall struggling to stay green. Another is the toppy spread charts for bull spreads.
The boxed beef market isn’t grinding but surging higher, up $2.17 at $216.14 on Choice today after a more than $3 gain Friday. An objective of $220 by next Monday, the timing for a seasonal top, will be easily attained. Expect good beef features for Labor Day weekend, Sept. 4-7 this year. August retail beef prices should be down from July, though well above a year ago and pork and chicken prices.
“Wide expectations for cash cattle prices this week are another $1 to $2 higher. The big surprise is that last week’s national negotiated direct cattle trade volume was 122k head, one of the biggest transfers of ownership from feeders to packers of 2020. This large ownership may give packers more patience this week and could slow the rise in cash cattle prices. Next week’s slaughter is already estimated to be smaller than this week,” Fish shared.
Oklahoma National Stockyards in Oklahoma City offered 6,700 head today and reported feeder steers sold $2-4 higher. Feeder heifers were mostly steady. All classes of steers and heifers suitable for grazing are trading sharply higher as much as $7-9 higher. Demand was good to very good with quality plain to a few attractive. Much cooler temperatures than normal swept in over the weekend and are expected to remain for the remainder of the week. Benchmark steers weighing 734 lbs. averaged $145.43. — Pete Crow, WLJ publisher
