Market analysts and our panel of Monday Market Sentiment experts presume the cash market has passed its seasonal low point and higher prices lie ahead. The optimism comes as feedlot occupancy is lighter and retail beef demand is expected to return after sitting dormant during the recent heat wave.
A survey of cattle-industry leaders shows markets will churn higher this week with the average price for cash cattle expected to improve by $1.09 to $121.31 per cwt this week.
The Monday Market Sentiment is a forecast of the upcoming weekly cash trade (5-Area weighted average price) prices reported by the USDA. Last week the USDA announced that cash trade for the week ending July 26th was $120.22, a 40 cent increase from the previous week.
Feedlot operators continue to see negative profit margins but recent factors forecast a turnaround is in the works. Lower corn prices have already lightened feeding costs, plus the cooler weather and rain across large portions of the United States have ended the heat wave, prompting grillers to visit the meat counter and get outside to grill.
The retail beef demand should prompt packers to bid, and prices are expected to increase more than the 40-cent jump seen last week as producers are taking advantage of improved grazing conditions, sending fewer cattle to the feedlot.
Each week the Cattle Trader Center, on behalf of Vance Publishing, awards a $100 gift certificate from Cabela's to the industry leader whose forecast comes closest to the 5-Area cash trade number reported by the USDA. The most recent winner was Joe Kovanda, Bartlett Cattle.