Thursday markets
Packers have slaughter volume back on track. They are up to 120,000 head per day and 80,000 on Saturdays. With the additional volume of beef on the market, boxed beef values have fallen to the point that packer margins are evaporating. Normally, they would reduce production to raise the cutout values. Analysts were expecting this week’s slaughter to be 665,000 head, which would start to clear some of the backlog of slaughter-ready cattle.
Futures markets have been trading sideways most of the week. June live cattle have settled into a
$93-96 trading range, today’s close was $96.07, and August live cattle closed at $96.10. Negotiated cash trade is down a couple dollars from last week between $98-102 live and $157-162 dressed. As of Thursday, 77,128 head had traded hands. Packers bought cattle every day last week.
DTN reported that “Live cattle contracts have bowed to the pressure looming amongst the industry, but the feeder cattle contracts are still trading higher. Wednesday’s feeder cattle sales averaged $2-5 higher, and so long as the support remains strong throughout the countryside, feeder cattle contracts should be able to trade somewhat higher until the pressure from weakening live cattle contracts outweighs the good.”
Beef values continue their free fall with the Choice cutout down to $213.64 and Select down to $206.06. The Choice-Select spread has narrowed quite a bit at $7.58. The grading report showed that 83.7 percent of slaughter was grading Choice and Prime, and Select was 13.3 percent of the slaughter mix, which is about 5 percent higher than the week before. The ground beef market remains robust with 90 percent fresh trim trading at $261.80 and the 50 percent lean at $79.80. The slaughter cow market has picked up quite a bit. The cow beef cutout was at $219.16, which is remarkable because it’s higher than the Choice cutout.
Feeder cattle futures also traded sideways. August feeders were trading in the low $130s; today’s close was $132.79; and August was at $134.25. The latest Feeder Cattle Index was $128.51.
In Superior Livestock Auction’s Tall Grass Sale, they sold 464 feeder steers weighing 835 lbs. for $121.50 for August delivery, and for contrast, they sold 385 steers weighing 850 lbs. that were all-natural, NHTC-verified with all the attributes for $156.50. — Pete Crow, WLJ publisher
