KANSAS CITY (Dow Jones)--The August live cattle futures price this week is up $2.12 per pound from a week earlier, and it's giving cash-strapped cattle feeders hope that fed-cattle prices this week will be up from last week.
Cash ideas circulating in the Plains as of Friday morning call for cattle to trade this week at $82 to $83 per hundredweight, which would be up about $1 from a week ago. Almost no cattle have traded so far this week, however, not even in Nebraska, which tends to lead the rest of the Plains in terms of when cattle trade.
Cattle traded last week at $81 to mostly $82 on a live basis and at mostly $129 up to $130 dressed, the analysts and brokers said.
Some market analysts and brokers, though, said the futures gains may not be as important to this week's eventual traded price as cattle feeders would like to hope.
Those analysts and brokers thought beef packers had ample inventories of contract and formula cattle and that their open-market needs for next week would be minimal. Without strong demand for nearly all of the cattle on a given week's feedlot showlists, prices tend to struggle for lack of competition, they said. Those feeders with a stronger selling motivation than other feeders often sell early just to get the cattle sold, undermining the resolve of others to hold out for higher prices.
But even if cattle feeders dig in and get $1 higher for cattle this week, at least one trader said packers may not buy very many. Cutout values are down for the week, and this is more important to packers who are buying the cattle than are the futures prices, which are more visible to the cattle owner.
Asking prices are mostly at $85 to $86, traders said.
The HedgersEdge packer margin index is a minus $15.30, compared with the previous index of a minus $7.30 per head. For the week, the index is a minus $8.07.
The U.S. Department of Agriculture on Thursday reported its choice boxed beef cutout price at $136.64 per hundredweight, down $1.44, while select beef was off $0.79 at $130.91. The volume of fabricated loads was 328 and there were 73 loads of trimmings and coarse grind product reported.
Urner Barry's Yellow Sheet Thursday reported an important element behind the steady-to-lower carcass cutout values was weakness in end cuts as processors took some discounted bids to move spot-market product.
Weakness seen with some boxed beef was offset by fatter trimmings trading at sharply higher levels, the Yellow Sheet said. Because of the price reductions, trade volumes were increased.
-By Lester Aldrich, Dow Jones Newswires; 913-322-5179; lester.aldrich@dowjones.com