Compared to last week, yearlings traded mostly steady to 3.00 higher (mostly early to midweek) with calves selling steady to 5.00 higher. In the Southeast calves traded unevenly steady to 3.00 lower. Several auctions late in the week mostly in the Northern Plains were 5.00-10.00 lower when compared to two weeks ago. After last week’s emotional and very draining week of trading with big moves to the downside in the commodity and equity markets feeder cattle and fed cattle prices were some of the biggest victims of the purge. Calf and yearling prices definitely had room to correct higher; which at most auctions showed some stability and strength this week.

The best demand for yearlings remains in the Northern Plains and the availability of yearling cattle is very tight which has created a good competition from cattle buyers needing to procure yearling cattle. In the major grazing areas, yearling supplies are dwindling as there are very few green yearlings left to sellIn McCook, NE on Monday at the Tri-State Livestock Auction sold a string of 306 head top quality yearling steers weighing 891 lbs and the gavel dropped at 214.10. The calf market took the full brunt force of last week’s losses as most steer calves weighing between 500-600 lbs are trading between 240.00-260.00; a far cry from the 3.00/lb seen not that long ago.

The fall run will soon be underway and usually calf prices feel the pressure as they are pulled off grass as receipts increase with many unweaned and fleshy calves coming to market. For the most part, feeder cattle prices are still feeling pressure from the losses of current fed cattle prices. We have previously seen huge premiums carried by the feeder cattle to the fat cattle and are starting to see a reality check as feeders are seeing prices dropping faster than the fats.

Packers are seeing some decent margins, but want to keep those as long as possible, while feedyards are trying to get some of it back; fighting lower bids. Lower fed cattle prices prevailed on Friday morning in Kansas with live sales 3.00 lower at 143.00. As the tendency for beef prices to soften after Labor Day, it also gives packers some leverage.

Cattle feeders have been trying to purchase feedlot replacements in line with the CME Board for hedging as yearlings, however that has not penciled out for a long time. In many cases, retailers are in the same boat as packers and feedyards; not sure how beef demand will play out going into fall and into the holidays and they are content to keep inventories in check. Retailers also see lower prices from large supplies of competing meats that keep features changing.

Fears of China’s financial concerns continue to bleed over into U.S. equity and commodity markets which produce a risk mentality for many of the agriculture markets and outlook for livestock prices. The velocity of last week’s sell-off should not be a surprise, but it does leave an impression on the markets. This keeps traders' attitudes, positions and frame of minds changing fast and in a hurry. Auction volume included 53 percent over 600 lbs and 36 percent heifers. USDA-AMS-LPGMN would like to wish everyone a safe and happy Labor Day weekend and hope good grilling weather is in store for everyone.