Monday markets
Cattle markets are getting off to a slow start this week with future markets all in decline. August live cattle were off $1 to $103.07 and October was down 50 cents to $106.50. Feeder cattle had a good rally last week, but gave a little back today; August feeders were down $1.10 to $141.60, September was off only 32 cents to $143, and October was off 62 cents to $142.99.
There was no negotiated live fed trade today. ShayLe Stewart, DTN market analyst, said, “Live cattle contracts are fighting resistance like the rest of the livestock complex has. Monday hasn’t granted the market much for favors. Asking prices have yet to be determined, though it is safe to assume live cattle will be priced at $1 or better.
“There’s been light packer inquiry throughout most of the feeding region, but bids have yet to hit the table. New show lists appear to be mixed, higher in Texas, somewhat higher in Nebraska/Colorado, but lower in Kansas.”
Negotiated cattle purchases last week totaled 88,651 head. Of that, 76,207 head are committed for delivery in the next two weeks, while the remaining 12,444 head will be delivered in the following 15-30 days.
Boxed beef prices are higher: Choice up $1.45 ($201.92) and Select up $0.81 ($191.12) with a movement of 51 loads (39.30 loads of Choice, 7.59 loads of Select, zero loads of trim and 4.09 loads of ground beef.)
Feeder cattle
After leading the livestock sector higher last week, the feeder cattle market has fell to the same pressure the rest of the industry faces. Feeders are hoping that the week will turn around as there’s another big feeder cattle sale this week. Northern Livestock Video Auction is hosting their Summertime Special sale, selling upwards of 145,000 head this week. If the sale can mirror the same strength that developed last week in Reno for the Western Video Market sale, then producers will be well taken care of.
Today auction markets reported stronger markets. National Stockyards in Oklahoma City offered 8,000 head. All classes of feeder and steer calves traded $2-6 higher, feeder heifers $1-4 higher, and heifer calves $4-6 higher. Demand was good to very good. Dry and unseasonably cooler weather is in the forecast. Benchmark steers weighing 771 lbs. averaged $141.05.
Joplin Regional Stockyards in Carthage, MO, offered 4,145 head today and reported all classes $2-5 higher. Benchmark steers weighing 768 lbs. averaged $144.62.
Cassie Fish in the Beef is forecasting the market, “One of the ways cattle feeders have managed the backlog is to stop using beta agonists and to push the marketing-out date of cattle out by 14 to 21 days. This, along with the premium futures, is altering the marketing calendar and effectively moving cattle back. It’s also allowing cattle to express their full genetic potential, which is larger carcasses. This will keep carcass weights and beef production elevated through the remainder of 2020.
“The 1 million head drop in placements the first five months of 2020 combined with the +800k head backlog means there are about a quarter of a million cattle to slaughter the second half of 2020. Depending on weights, that deficit can be made up in weight.
“And the cattle not placed then will be placed and at heavier in-weights, which translates to heavier out-weights. By the time we get well into the fall, the industry will have a record number of cattle on feed heading into 2021.
“The final point here is, with retail prices record high by over $1, wholesale beef prices the lowest for July in seven years—both a direct result of COVID-19—it will take time for these macro changes impacting the beef industry to get worked through. Unlike the Finney County fire, this historic incident will affect the entire beef industry for years, not months to come.
“Futures lows are likely in and cash prices may not trade much lower than what has already been established. But the cash market may stay cheaper than expected for longer than thought, draining equity, and slowly and subtly reshaping the business. And this may be accentuated by the feeding industry’s focus on running volume.” — Pete Crow, WLJ publisher
