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 Thursday last week. We had a strong negotiated fed cattle trade the week prior with 122,000 head selling. Through Thursday, 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 last week. August live cattle closed Thursday 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 last week. Through Thursday, 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.”
Beef markets continued their seasonal rally going into Labor Day, the last big beef consuming holiday for summer. The Choice cutout was much stronger, gaining over $13 for the week to $225.38. Select beef, which is only 15 percent of slaughter volume, posted advances to $206.31 on 150 loads. There is currently a $19.07 Choice-Select spread. Roughly 83 percent of the slaughter mix was Choice or better.
Cassie Fish at The Beef said on Thursday, “CME cattle futures are down today, though most have yet to make a new low for the week, there is a growing sense that all the good news has been priced for now. Light volume and a narrow trading range has characterized futures trading all week and it’s taken until today for action to pick up on the down. Though today’s weakness is still inconclusive technically.
“Oct live cattle is heading into the pre-roll heavily laden with longs and given the expectation of seasonally weaker boxed beef and cash cattle prices in early September, October live cattle would seem to be vulnerable to the downside. The basis has certainly narrowed and if October live cattle were to slip discount to cash, that would increase the willingness of cattle feeders to sell.”
Hub City Auction, Aberdeen, SD, sold 1,935 head in their Aug. 19 sale and reported, compared to last week: steers were not well compared; the best test was on heifers 700-750 lbs., 800-850 lbs., and 950-1,000 lbs. at steady to $2 higher.
Good to very good demand for loads, packages, and a couple strings of yearling cattle offered. “Like the week before, cattle came both off grass and out of yards, however, flesh today varied less than last week with mostly moderate to moderate plus flesh seen on today’s offering. A few preconditioned spring calves on offer today, these were met with good demand.
“Quality was mostly average to attractive today. An active market seen for this offering. Wheat harvest mostly finished in this area, some of the drier areas have started chopping corn.” Benchmark steers weighing 774 lbs. had a weighted average price of $149.47.
OKC West in El Reno, OK, offered 5,774 head in their Aug. 19 sale and reported compared to last week: feeder steers traded $2-5 higher and feeder heifers sold steady. Demand was good especially for heavier weight feeder steers. Steer and heifer calves sold fully steady with the week prior’s higher market. Demand was good and quality plain to average. Benchmark steers weighing 762 lbs. averaged $147.20. — Pete Crow, WLJ publisher
