Cattle markets continue to get stronger; feeder cattle markets are remarkable. Both Western Video Auction and Superior Livestock Auction held big sales in Wyoming. Combined, they sold over 250,000 head of yearlings and calves for fall delivery and some bred stock.
Fed cattle markets were slow to develop with 81,150 head selling through today. We had a strong negotiated fed cattle trade last week with 122,000 head selling. Through today, 81,150 head traded between $106-108 live and $168-170 dressed. Cattle feeders are attempting to advance the market through the Labor Day rally.
Futures markets were trading in a narrow range this week. August live cattle closed today at $107.02 and October closed at $109.77. Despite trading modestly lower, the market is still supported by a stronger cash market. Feeder cattle futures were mostly down for the week.
“Feeder cattle contracts have traded mostly lower through Thursday morning as the market has felt downward pressure rising throughout the last week and was incentivized to continue to trade lower as the live cattle contracts scaled back. The market’s pulling back from the board isn’t a country-based idea as Wednesday’s feeder cattle prices throughout the nation were higher again, average $3 to $5 stronger than last week’s sales,” said DTN Livestock Analyst ShayLe Stewart.
Fed cattle slaughter is getting stronger and folks are looking at 650,000 head for this week. For today, the estimated slaughter was 470,000 head which would be 4,000 head more that the same week last year. There are plenty of heavy weight fed cattle that need to be processed. Fed steer carcass weights were 6 lbs. heavier last week to 882 lbs. which is 26 lbs. heavier than the same week last year.
The folks at the Cattle Report said, “Many cattle owners, both hedged and unhedged, have been holding cattle awaiting convergence between cash and futures. Many of these groups of cattle have reached or exceeded normal marketing weights and are subject to carcass penalties either through discounting the live price or assigning a large overweight discount to the carcasses.
“Packers were able to pick on these cattle on Wednesday to hold cash prices at bay. Both Texas and Kansas sold cattle at $106 [the bottom end of Tuesday’s range] while Nebraska continues to hold for higher prices. The few trades in the North were mainly $108 live and $170 dressed with asking prices higher. Packers are expected to stay in the market today and tomorrow to finish acquiring their slaughter needs.” — Pete Crow, WLJ publisher
