Leverage in the cash fed cattle trade turned modestly toward cattle feeders last week with the market jumping $3 to $4 per hundredweight higher to $118. Cattle on a dressed basis sold at $184 to $186 per hundredweight. Feedyards will begin this week asking higher money again with ideas market-ready supplies are declining.
Packer margins have been on the decline and will continue to be a persistent problem in the coming weeks. Feedyards have struggled with significant losses much of the summer, but margins should show improvement moving forward.
Despite the fact the fed market has moved $5 per hundredweight off the summer lows, cattlemen in all segments of the industry face significant challenges in the months ahead. Drought, low forage supplies and sky-high corn prices top the list – in no particular order.
Choice boxed beef values closed Friday at $178.14, an increase of $1.20 per hundredweight from the previous week. Select boxed beef prices were quoted at $171.63, up $1.60 from the previous Friday. The Choice-Select spread stood at $6.51 per hundredweight.
Feeder cattle and calves posted a nice gain for the week, with yearlings quoted at $1 to $4 per hundredweight higher and calves in the Southeast trading $3 to $6 per hundredweight higher. Calves in other areas of the country were called unevenly steady. USDA Market News reports that the first week of August marks the first time since the first week of June that prices were predominantly higher.
The trade in stocker and feeder cattle was called active with good buyer demand. That left more than a few market watchers scratching their heads as the heat and drought persist throughout the Midwset. Hay stocks have been reported as the lowest in 10 years. USDA called 48 percent of the corn crop “poor” to “very poor” compared to 45 percent in those categories last week and 14 percent last year.
Last week’s auction receipts totaled 126,200 compared to 119,400 last week and 158,700 last year. Direct sales of stocker and feeder cattle totaled 65,800 with video/Internet sales at 206,800. The weekly total was 398,800, compared to 456,300 last year.
Slaughter cows and bulls sold $2 to $7 per hundredweight higher, except for bulls in the north where prices were steady. USDA's Cutter cow carcass cut-out value Friday morning was $163.39, down $0.97 from the previous Friday. Omaha cash corn was 21 cents per bushel higher for the week at $7.99 per bushel.