After dropping another $1.50 or so last week, fed cattle were decidedly on the defensive this week.On Tuesday, a big drop in Live Cattle futures made lower cash prices for the week all but certain.In fact, feeders in Nebraska and Iowa/Minnesota went ahead and took their licks on Tuesday.In uncharacteristically early trading, cash prices in those regions were $1.50 to $2 lower at $82.50 to $83 live.Dressed prices were about $3 lower at mostly $132.Feeders in the South sold cattle on Thursday at $82 – down $2 to $2.50 from last week.Cattle slaughter is estimated at 670,000 head this week, down from 692,000 head a year ago.(Last week was a short week due to Memorial Day.)
With the fed cattle market on the defensive, corn trading all over the place, and feeder cattle futures having their worst week in a long time, calf markets around the country generally took a hit this week.At Oklahoma City, prices on all classes were called steady to $2 lower in a very large sale (receipts of 17,202 head).In Lexington, KY, feeder steers and heifers were $1 to $2 lower.Stocker steers and heifers were weak to $3 lower.In West Plains, MO, steers over 750 pounds were $2 to $4 lower; steers from 400 to 750 pounds were steady to $2 lower; and lighter weights were too few to call a trend.Heifers were steady to $2 lower on most weights, but 450 to 650 pound heifers were noted to be $1 to $3 higher.In Arkansas, prices on all classes were $1 to $4 lower.In Georgia, feeder steers were $2 to $3 lower; feeder heifers were $1 to $2 lower.Stocker steers were $1 to $2 lower; and stocker heifers were $1 to $3 lower.
At Mississippi auctions this week prices were reported as $1 to $4 lower on all classes. Price for steers (medium and large, 1-2) in Mississippi auctions throughout the week were as follows: 200-300 pounds, $120-$130; 300-350 pounds, $120-$128; 350-400 pounds $110-$120; 400-500 pounds $100-$109; 500-600 pounds $95-$107; 600-700 pounds $90-$100; 700-800 pounds, $85-$97. Slaughter cows were $2 to $5 lower this week. For the week cows brought $41-$48 for boning cows (850-1,200 lbs) and $37-$47 for lean (850-1,200 lbs).
Live Cattle futures dropped hard on Monday and, especially, Tuesday.Last week’s lower cash trade did nothing to support the market at the beginning of the week (though basis was still pretty strong at the end of last week).The real pressure in the market came from declining wholesale beef values – particularly worrisome at a time when demand should be enjoying seasonal support – and sharply lower Lean Hog futures.Lean Hog contracts were down the daily limit on Tuesday, pulling Live Cattle contracts down sharply as well.Live Cattle did recover a bit to close out the week, supported by pretty good beef movement (albeit at lower prices) and some better-than-expected news on the overall economy.Live Cattle futures closing prices on this Friday (with change from last week’s close in parentheses) were as follows: August $81.10 (-0.72); October $86.60 (-1.10); December $88.93 (-1.10); February $90.88 (-0.97); April $92.80 (-1.25).
Feeder futures got hammered this week.After a pretty big loss on Monday, all contracts closed down the daily limit on Tuesday.Pressure from Lean Hogs and Live Cattle compounded the effect of volatile corn futures.The market appears to have suddenly decided that Feeder Cattle futures have been rather substantially over-valued.The failure of Live Cattle to get any traction in recent weeks, the sharp counter-seasonal move in wholesale beef values, and what seems to be growing concern over the upside risk in the corn market all contribute to this perspective.Supply-side fundamentals remain favorable in the feeder cattle sector, but for this week at least, focus shifted to what they might be worth as fed cattle and what it might cost to get them there.Feeder Cattle futures closing prices on Friday (with change from last week’s close in parentheses) were as follows: August $96.63 (-5.13); September $96.93 (-4.77); October $97.58 (-4.22); November $97.65 (-4.50); January $96.15 (-4.52).
Corn futures jumped higher on Monday and then swung wildly back and forth for the rest of the week.The corn crop is pretty much planted now, with Monday’s Crop Progress report calling this year’s planting 93% complete through the end of last weekend.For what it’s worth, which is probably not much this time of year, the crop’s condition was put at 70% good-to-excellent: certainly better than last year at this time.This is kind of an in-between time for the corn market: the crop is planted but total acreage remains uncertain and it’s too early to worry much about crop condition.Outside markets are a key factor right now.Corn will probably take its cues from the oil market and the stock market for the time being.Given what oil is capable of doing, this is not a pleasant prospect for the livestock industry.July corn closed at $4.44 on Friday, up 7 ¾ cents over last week.The harvest time price of the September contract closed at $4.54 on Friday, also up 7 ¾ cents.
Wholesale beef prices dropped again this week, falling sharply at the end of the week. Movement was good at the lower prices, with 550 total loads (including cuts, trim, and grinds) sold on Thursday. The Choice cutout worked out to $138.65 in Friday afternoon’s report, down $5.46 from a week ago.The Select cutout stood at $133.59 on Friday afternoon, down $4.95 from a week ago.These are the lowest cutout values in about 2 months.