The futures markets seemed a bit confused where they wanted to go, so they went down a bit. June live cattle lost 32 cents to $93.30 and August was off 85 cents to $96.35. Packers are consistently getting 120,00 head a day processed and the slaughter weights are a heavy 873 lbs., which was 4 lbs. lower than last week, but still 51 lbs. over the five-year average.
Feeder cattle were a little softer today, with August losing 32 cents to $132.87, September down 30 cents to $134.17 and October down 25 cents to close at $135.17.
Tomorrow’s open will be watched by many feeder cattle buyers. Both Northern Video Auction and Superior Livestock Auction will have big sales Thursday. Otherwise feeder cattle trade in the country has been quiet today.
With more beef on the market, the cutout continues to fall, the Choice cutout losing $2.12 to $209.99 and Select down to $201.69 on 196 loads priced today. The ground beef markets haven’t lost near as much as the fed beef cutout; the 90 percent lean was at $256.83 and the 50-50 trim was at $68.51.
These markets have only lost about 18 percent of their value from the peak several weeks ago. The last quoted cow beef cutout was $206.34 on June 19. The same day, the Select cutout was posted at $203.81; the cow cutout was $3 higher than Select beef.
Live negotiated cash trade today was met with moderate demand; 24,440 head traded today in Nebraska. Compared to last week, live purchases traded $3-4 lower from $95-98. Dressed purchases compared to Tuesday traded $1-2 higher from $155-156, bulk at $156.
Trade was light with light to moderate demand in the Southern Plains and the western Corn Belt. In Kansas compared to last week, early live purchases traded mostly $5 lower from $95-97, bulk at$ 97. In the western Corn Belt, compared to Tuesday, dressed purchases traded steady to $1 higher from $155-156, bulk at $156.
Live purchases on Tuesday traded at $98. In the Texas Panhandle, a few early live purchases traded at $97, however there were not enough trades for an adequate market trend. Last week in the Texas Panhandle live purchases traded from $98-102.
The Cattle Report said today,” New hopes for a boost in demand from the Chinese were the subject of discussion in ag circles. Reliance on the Phase One trade agreement with the Chinese is problematic, but the worldwide protein shortage is not imagined and will be felt in all international meat trade. If the boost is expected to relieve the backlog of fed cattle, it will require the beef plants to ramp up the slaughter above 700,000 head and there is a question mark about that probability.”
Cassie Fish in the Beef also said today, “If boxed beef values and cash cattle prices continue to erode in July due to large supplies of beef and market-ready cattle, then August live cattle too will erode.
“Technically there is substantial support for Aug LC from $93 down to $90 and that is spitting distance to last week’s low of $93.57. Will Aug LC find support against its June lows or will further erosion take place?
“That will depend a great deal on just how low prices need to decline in order to move record supply in July, since the pipeline will finally be fully refilled by next week. It may be easier to transfer bullish hopes to Oct LC and beyond rather than fight the fight with the Aug LC contract.” — Pete Crow, WLJ publisher