In this lackluster summer market, cattle feeders actually see some hint of profits.
Cattle slaughter last week, estimated at 628,000 head, was flat with the previous week but down about 10 percent from the same week last year. Packers are holding the line on purchase prices and numbers, as wholesale beef prices continue to stagger along, finishing last week at $137 per hundredweight.
Finished cattle that sold last week brought $81 to $82 per hundredweight in the live market and $129 to $130 dressed, down slightly from the previous week according to USDA’s Five-Area report. Cattle futures also were generally flat last week, with the August contract finishing at $83.70. Deferred contracts continue to show premiums later this year, with October closing last week at $88.85 and December at $88.95.
Evan as cattle prices seem stagnant, the big shift in the market over the past couple weeks has been in corn, after USDA’s June 30 Acreage report showed corn acreage up from previous estimates, and well above what most analysts expected. Corn cash and futures prices have dropped since then, and
That decline in corn prices and production costs has improved the outlook for cattle feeders considerably, and it’s likely that feedyard placements will pick up in the coming weeks. Our exclusive Sterling Beef Profit Tracker last week showed feedyard closeouts moving back into positive territory, if just by a little. Packer margins remain negative though, and wholesale beef prices will need to improve before packers show much interest in higher bids on cattle.