Compared to last week, calves and yearlings traded weak to 5.00 lower with a number of instances 10.00 lower from midweek on. Direct sales traded steady to 2.00 lower early in the week, then turning 3.00-7.00 lower late week. Cattle futures seem to keep the focus on the bearish side, not wanting to show much life.
Cattle futures on Wednesday reared their ugly head closing with sharp triple-digit losses, making new lows for the month. Market psychology keeps focus on negative fundamentals, with plentiful supplies and lower prices for competing meats, struggling outside markets, lower meat exports and the focus of trading the market on what is happening right now.
The Stock Market is on course for its lowest finish of the year, as the Dow closed over 350 points lower on Thursday dropping below 17,000 points. Stocks fell sharply on global growth worries that rattled the markets from China to Germany and the U.S. It was the Dow’s worst performance in 18 months. Losses then continued on Friday as the global market rout deepened with the Dow losing over 500 points on Friday as of this writing.
Oil futures are also hovering near 6-year lows at near 40.00 a barrel. This attitude and volatility dominates the market at this time. Global worries also swamped the cattle complex on Friday as Feeder Cattle futures dropped limit down. Lack of fed cattle support made its impact and weighed heavy on the feeder cattle market this week as fed cattle trade on Wednesday was 4.00-6.00 lower on dressed sales in Nebraska ranging from 232.00- 234.00. Any leverage that tight fed cattle numbers may hold doesn’t seem to matter as demand remains light to moderate at best. In the next 30-45 days auctions should see a good number of feeder cattle moving off pasture into feed yards. Unless the fed cattle market gets a move up the feeder cattle market won’t be able to maintain the premiums that has been paid for yearlings and calves the previous months.
Despite lower prices this week it was still pretty optimistic in Valentine, NE on Thursday selling near 485 head of yearling steers weighing 900-950 lbs averaged 917 lbs sold with a weighted average price of 212.52. Near 775 head of their bigger brothers averaged 964 lbs sold with a weighted average price of 205.76. Time is running out to take advantage of summer grilling demand and with the fed cattle market remaining stagnant, cut- out values have made some steady gains over the last couple of weeks heading into Labor Day Weekend. But boxed-beef values closed on lower on Friday, following commodity markets lower as Choice cut-out closed down 1.56 at 244.90.
This week the Pro Farmer Crop Tour is being conducted through the Eastern and Western Corn Belt and through the Midwest. So far corn yields in Indiana 142.9 bpa, Ohio 148.4 bpa, Nebraska 165.2 bpa and Iowa 180.2 bpa are below USDA estimates with South Dakota 165.9 bpa and Minnesota 190.8 bpa above USDA estimates and Illinois pretty much unchanged at 171.6 bpa. The big question remains whether or not good yields in the Western Corn Belt will compensate for lower yields in the Eastern Corn Belt; so far corn yields on the Pro Farmer Tour will not increase from USDA’s estimates. The August 1st Cattle on Feed Report appears to be neutral as Cattle on Feed was very close to expectations at 102.6 percent; Placements came in at 99 percent and Marketings at 97 percent both lighter than expected and were lowest for the month of July since the series began in 1996. Auction volume included 54 percent weighing over 600 lbs and 36 percent heifers.