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Monday markets

Cash markets were trying to drift lower, but futures may be providing some resistance. We have a short week ahead with the Fourth of July being observed on Friday, July 3. Packers are trying to ramp up production as much as possible with today’s estimate pushing 121,000 head.

Futures were a bit stronger; June live cattle were 30 cents higher to $95 and August was up 45 cents to $96.47.

Feeder cattle were also a bit higher with August moving 90 cents higher to $133.50 and September 50 cents higher to $134.27. It appears the boxed beef cutout has stabilized with Choice gaining $1.19 to $208.36 and Select $1.86 higher to $200.07.

Packers were aggressive receiving formula grid cattle; 47,900 head were priced on the formula grid at 888 lbs. and priced at $162.50. Only 5,738 head were traded on the negotiated cash market today.

Trade was light on light-to-moderate demand in the western Corn Belt. Compared to last week, early dressed purchases traded steady to $3 lower, mostly at $153. A few early live purchases traded from $95-97, however there was not enough for an adequate market test.

The latest established live market in the western Corn Belt was last week with purchases mostly from $97-98. Trade was mostly inactive on light demand in the Southern and Northern Plains. The latest established market in the Texas Panhandle was last week with live purchases from $93-95, with a few up to $97. Last week in Kansas, live purchases trade from $95-97, bulk at $97. In Nebraska last week, live purchases traded from $95-98, bulk at $95. Dressed purchases last week traded from $155-156.

ShayLe Stewart, DTN market analyst, said the market was active. “Despite the ginormous backlog of cattle continuing to be an issue for the industry, the live cattle complex is trading higher into the noon hour.

“The week is anticipated to be mostly quiet as slaughter will mostly likely be smaller than last week's kill with the holiday weekend. New show lists appear to be higher in Kansas, somewhat lower in Nebraska/Colorado, and lower in Texas. Bids and asking prices have not yet been established throughout the countryside.

“Feeder cattle contracts are far from interested in trading higher as the complex has traded lower throughout the entire morning. After last week's push to see stronger prices throughout the countryside, the complex will most likely coast through this week without too much excitement. Seeing that some cow/calf country is getting rain is a positive win for producers as many worry that hay prices are going to be up from last year's prices.”

Cash feeder cattle markets were stronger. Steers and heifers sold steady to $4 higher, with the biggest advance being in the North Central region. Loads of yearlings continue to find the marketplace with good to very good demand at auctions this week, bringing some much-needed excitement to the auctions.

Receipts for this report will be curtailed next week due to the Independence Day holiday occurring late week. Weather in the Midwest has proven to be better than the long-term forecasts released a couple months ago. Ranchers have had ample opportunity so far this summer to get their winter forage supply baled up in either round or square bales.

Cassie Fish, market analyst in The Beef said today, “The tone for this week’s boxed beef and cash cattle trade are the same—continued erosion. In the north this morning only one major has bid $153 dressed on limited head count which is the at the low end of range of cattle traded on Friday. The remainder of the packers are not bidding on Monday of this holiday week.

“Thanks to a Saturday holiday though, this week’s slaughter schedule will be mostly a five-day kill week and the total could reach 600k head, which would be 22k above a year ago. Last week’s full kill was higher than expected at 680k though a downward revision won’t surprise.

“The larger production is very welcome by end users who continue to refill the pipeline and increase offerings to consumers. Ends and grinds are reaching a level of support while middles will continue to decline into July, though not as swiftly as has been the case.

“The cutout is trading at the lowest level for any June since 2013. Hopefully, this will result in an increase in beef features soon. Out-front bookings have picked up in the last couple of weeks.

CME cattle futures continue to trade light volume with little change in open interest from day to day. The most recent Commitment of Trader’s report released by the CFTC showed very little of interest, the various participants offsetting one another’s limited activity.

“Today’s action shows a little-changed Jun LC, that will expire tomorrow at noon while the rest of the contract months trade defensively in the same trading range that has worn on for many weeks.” — Pete Crow, WLJ publisher

 

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