Compared to last week, a light test of feeder cattle did not quite produce the “ooohs and ahhhs” heard immediately after the 4th of July fireworks with yearling feeders trading mostly steady to instances 3.00 lower. Calves were lightly tested throughout the Midwest and Southern Plains with prices not well tested but trading mostly with a steady undertone. In the Southeast, several markets were trading unevenly steady to instances 5.00-10.00 lower on calves. There has been significant volatility throughout the markets over last week and this week.
Cattle futures have mixed underlying fundamentals and traded with sharp triple-digit losses on Wednesday as feeder cattle contracts traded over 3.00 lower. Somebody must have forgotten to tell the auction market in Bassett, NE on Wednesday’s BBQ special with 5300 head on offer; as over 400 head of 900- 950 lb steers averaging 933 lbs sold with a weighted average price of 223.53 and over 1100 head of top quality yearling steers ranging between 950-1000 lbs averaged 960 lbs and sold with a weighted average price of 218.13. The prices on these top quality steers weighing from 875-975 lbs sold 2.00-4.00 higher than last year’s special.
Cash feeder markets remain very strong especially on heavy yearlings over 800 lbs; as on Thursday in Valentine, NE sold over 3000 yearlings with over 250 head averaging 893 lbs sold for a weighted average price of 226.47 and over 700 head of their bigger brothers weighing 1000-1050 lbs averaging 1013 lbs dropped the gavel for a weighted average price of 205.97. Superior Video’s Week in the Rockies this week featured 260,000 head of calves and yearlings being sold with the final results to be out on Monday.
Market pressure came from sharp losses on the Stock Market on Wednesday after a tumble in the Chinese Markets that spilled over into other financial markets as US stocks have seesawed in recent days with financial issues in China and Greece. Then on Thursday stocks rallied on the Dow, Chinese and European Markets, making little sense of the sell-off the day before and in most cases meaningless to the cattle complex. But losses continued in the futures even when light dressed trade developed in Nebraska ranging from 239.00-242.00 steady with last week. We are starting to see an increase in volatility in the markets which is a pretty good sign that they want to move from their current levels especially in the grains.
Grains are looking to move higher as excessive amounts of moisture through the Midwest and eastern Cornbelt have in some areas seen crop conditions deteriorate over the last several weeks. No doubt the debate will start over grain numbers; how widely varying crop conditions have developed throughout many important production areas. Corn crop was rated 69 percent good to excellent this week compared to 68 percent last week. USDA released its WASDE Report on Friday with USDA lowering old-crop corn stocks by 97 mb to 1.78 bb and soybean stocks lowered by 172 mb to 255 mb. USDA left corn yields unchanged at 166.8 bpa and soybeans at 46 bpa; new crop corn production came in at 13.53 bb slightly higher than pre-report estimates and ending stocks at 1.6 bb within range of pre-report estimates.
The cattle complex seems to want to move lower and keeps testing some overhead resistance, but last week packers scrambled to secure inventory paying higher prices and building on that support seen last week to buy fed cattle this week mostly steady on live prices ranging mostly from 150.00-152.00. On the other hand Boxed-Beef prices returned from the Holiday weekend with a bad hangover with prices in full retreat with Choice product losing near 16.00 dollars in the last eight trading sessions with Choice closing at 236.98 down 2.74 on Friday. Auction volume included 47 percent over 600 lbs and 37 percent heifers.