Thursday markets
It was a good week in the cattle markets this week. Futures markets followed the feeder cattle cash market to the $140 zone. Western Video Market had a remarkably good sale and lead the industry to a new trading level on feeder cattle and calves for fall delivery.
As usual, the program cattle—NHTC, verified natural, GAP and other attributes—provided premiums to those producers who went through the extra production stages. Premiums were as high as $30/cwt for those detailed cattle.
ShayLe Stewart, DTN market analyst, said, “Feeder cattle contracts continue to spring forward as half of the complex trades over $2 higher. August feeders are up $3.17 at $142.60, September feeders are up $3.20 at $142.75 and October feeders are up $2.70 at $143.20. As the market rallies to prices not seen since early this spring, the industry is pushing this rally as feeder cattle prices rolled far stronger than assumed this spring/early summer.
“With Western Video Market’s sale concluding this week, buying interest was evident especially on weaned calves and on programmed (NHTC or GAP) yearlings. As the week starts to near the finishing line, producers are anxious that the market can keep its strength not only through Thursday but through the end of the week.”
Fed cattle markets were steady to slightly stronger in some situations, but the weighted average was down. Live fed negotiated trade ranged between $95-100, but ended up with a weighted average of $96.33, 50 cents higher than last week. Dressed trade was down a dollar with trades ranging between $157-160 and had a weighted average of $157.64. There were 65,379 head that traded hands as of this afternoon.
Slaughter levels have relaxed a bit now that the cutout is down and packer margins are threatened. There were 117,000 head processed today and 470,000 head for the week through today, 4,000 head behind last week’s slaughter of 664,000 head, which was 8,000 head more than the same week last year.
Beef prices are stale with the Choice cutout hanging on to $200.05 and Select at $191.27 on 172 loads. Trim markets were mixed—the 90 percent lean was $10 lower than last week at $239 and the 50 percent lean trim was stable at $49.72.
Stewart also said, “Live cattle contracts are on to higher prices as the feeder cattle complex paves a way for the live cattle contracts to follow. August live cattle are up $1.97 at $103.27, October live cattle are up $2.05 at $106.60 and December live cattle are up $1.92 at $110.10. Breaking out of the sideways trade is truly refreshing and now the industry patiently waits to see if the rally will hold strong through closing.
“Feeders are liking how the board is trading and are trying to get their full asking prices out of packers this week for the remaining cattle they’d like to sell. Bids of $157 are noticed throughout the countryside, but hopes of $158-160 are still strong in the North. Packers are expected to inquire more on cattle throughout the day and could very likely up their bids.”
The folks at the Cattle Report commented, “Boxed prices were flat, hanging on to a level barely above $200 on Choice cuts. The dog days of summer have never been high demand periods of beef, but adjustments and corrections to low inventories have boosted prices. With the economy in the tank and beef production running well over last year, the ability of the beef market to sustain a level price has surprised many.
“Thanks should be extended to our export trading partners. Grading remains well over prior year. Over-finished cattle have produced a high percent of Choice and Prime and as you might expect lots of yield grade 4s and 5s. The Choice/Select spread was $9—a low number for this time of year.”
Auctions around the country were all stronger and with better prices; more cattle should come to market. The next Cattle on Feed report is expected to be natural with cattle on feed up just two-tenths of one percent, which seems manageable. Placements are predicted up five percent and marketings just seven-tenths above last year.
National Stockyards in Oklahoma City offered 8,000 head today and reported feeder steers under 850 lbs. $2-6 higher; over 850 lbs. steady to $2 higher. Feeder heifers traded $1-4 higher. Steer and heifer calves were lightly tested, but a higher undertone was noted.
Demand was very good for all classes. Much needed moisture fell over most of the trade area bringing relief to much of an early drought. Benchmark yearling steers weighing 767 lbs. averaged $139.60.
In the country, Hub City Auction in Aberdeen, SD, offered 1,568 head and reported a lighter offering than last week with few comparable sales. The best test was on steers 850-950 lbs. at $1-3 higher. Heifers were not well tested for comparison. There was good demand for today’s offering of mostly steers sold in a long string and a handful of loads. Benchmark yearlings weighing 792 lbs. averaged $146.06. — Pete Crow, WLJ publisher
