Wednesday markets
Cattle markets were much stronger today; all of a sudden a bullish tone showed up and pushed fed cattle up over a buck. August live cattle were up $2.50 to $101.30 and October was $1.45 higher to $104.55. It’s starting to appear that cash markets are starting to lead futures around and produce some real price discovery.
Feeder cattle markets have been robust. Western Video Auction has been selling yearling and fall calves at least $5-10 higher than last week. Futures markets responded by adding $2.70 to the August feeder contract at $139.32 and September gained only 22 cents to $139.55. Program cattle have been fetching a good $20/cwt premium over long-weaned and vaccinated calves.
In today’s market it would be tough to sell fresh-weaned bawling calves. The yearling market was trading between $130-140 on 8-weight cattle; one bunch of program cattle sold for $167 and
Mike LaGrande from Northern California, who passed away last year, sold 550 steers weighing 680 lbs. that were organic, NHTC, GAP4 and had all the other natural attributes, and brought $175/cwt.
Slaughter levels are relatively stable with today’s estimated slaughter 119,999 head. So far this week packers have processed 353,000 head, just 1,000 head behind last week’s pace. Carcass weights remain high, 41 lbs. over last year. It appears the northern feeders are current while Southern Plains feeders are holding extra inventory. Dressing percentages in the south are 64.5 percent while norther feeders are 63.5 percent.
Today, 21,495 head traded hands. Negotiated trading in the Texas Panhandle has been limited on light demand. In Kansas, negotiated cash trading has been limited on moderate demand. In the Southern Plains, when compared to the last reported market on Tuesday, live trades moved mostly steady at $95. In Kansas, a few live trades moved up to $97.
So far for Tuesday in the Northern Plains and western Corn Belt, negotiated cash trading has been slow on moderate demand. In Nebraska, a few live and dressed trades moved at $96 and $157, respectively. There were not enough trades for a full market trend. Last week, live trades moved at $96 and dressed trades moved mostly at $157.
In Colorado, when compared to last week, live trades moved $1 higher at $96. In the western Corn Belt, when compared to the prior week, dressed trades moved steady from $157-160. Not enough live trades for a market trend. Tuesday was the last reported live trade market with trades from $97-100. There were only 16,500 head priced on the formula grid today at $153.10. My guess is packers are running out of contract cattle for the month.
Beef markets have hit the summer doldrums with Choice losing a few dollars to $200.76 and Select down to $191.37. Trim markets remain solid with 90 percent lean trading at $248.45 and the 50 percent leant at $49.85, relatively stable over the past couple weeks.
Market Analyst Cassie Fish’s read on the market was, “On a good day like today, the tighter supply of market-ready fed cattle in the north is a positive. Two small regional packers, who live in the spot window, have paid as high as $97.50 live in western Nebraska and $160 dressed in eastern Nebraska. One has even ventured into Kansas and paid $96 and $96.50.
“At the same time, major packers in the south bought cattle yesterday at $95 and are bidding $94 and $95 with time today. Cattle are being hauled north out of Kansas by the thousands as the industry seeks to clear the mammoth backlog by geographically redistributing inventory.
“On a not-as-good-day, the south’s over-supply of front-end fed cattle will limit the north and drag the entire market down.
“On the beef merchandising front, the packer is faced with having to market the largest amount of beef in July in history thanks to massive carcass weights, and the task is proving formidable. The USDA has not printed this morning’s wholesale quote yet due to technical issues, but prices are expected to move as much as another $5-10 lower in the coming several days in order to stimulate demand and hopefully clear volume.
“Packer margins have narrowed and though still profitable, will narrow again this week. This week’s slaughter is expected to be 650k head, 5k head lower than a year ago and 7k head lower than last week. So, the plans to get the backed-up cattle dead in hurry have changed to a more methodical, measured pace.”
Hub City Auction in Aberdeen, SD, offered 1,568 head and reported a lighter offering than last week with few comparable sales, best test on steers 850-950 lbs., $1-3 higher. Heifers were not well tested today for comparison.
There was good demand for today’s offering of mostly steers sold in a long string and a handful of loads. A few packages offered, quite a few of these were fall calves and these light calves are met with very good demand. Less flesh overall than last weeks’ offering, most cattle today in moderate to moderate plus flesh, a few packages off grass in light flesh. Quality was mostly average to attractive. A moderate to active market with most of the normal crowd of buyers attending. Benchmark yearlings weighing 792 lbs. averaged $146.06. — Pete Crow, WLJ publisher
