Market Highlights: Packers Using Leverage on Cattle Feeders

FSIS finds "systemic" inspection and sanitation problems during Canadian audit.

FED CATTLE: Fed cattle trade was not well established at press. Asking prices on a live basis were mainly $115 to $117 while bid prices were mainly $110 to $111. 

The 5-area weighted average prices thru Thursday were $114.25 live, up $4.43 from last week and $180.90 dressed, up $3.27 from a week ago. A year ago prices were $135.14 live and $219.34 dressed.

Capture1

The 5-area price with cattle traded thru Thursday can be misleading when the number of cattle traded is not included. In this week’s case, only 455 head were marketed on a live basis thru Thursday and 813 head on a dressed basis.

The spread between asking prices and bids was $5 to $7 which resulted in a standstill through much of the week. Trade was also slow to develop on Friday as cattle feeders and packers were both firmly holding their ground.

Packers have leverage on cattle feeders due to several market ready cattle being available, but cattle feeders being current with marketing and stronger live futures provide them short term wiggle room. The next several weeks may be similar to this week with late week trade.

BEEF CUTOUT: At midday Friday, the Choice cutout was $226.59 up $0.18 from Thursday and down $1.43 from last Friday. The Select cutout was $204.61 up $1.20 from Thursday and down $0.48 from last Friday. The Choice Select spread was $21.98 compared to $22.93 a week ago.

Capture2

Middle meats remain a top selection for Father’s Day as many families treat their father to a nice steak item. This demand has contributed to strength in the rib and loin primal. However, the market tends to transition to more ground and processed beef items moving deeper into the summer.

Moving towards Independence Day, consumers begin leaning toward grilling hamburgers and all beef hotdogs. Ground beef and processed beef items such as hotdogs result in a significant pull on 90 percent lean beef and 50 percent lean trimmings.

Fresh 90 percent lean beef originates from slaughter cows, and the price has been inching its way higher since the beginning of the year. With current prices near $222 per hundredweight, a price peak just under $230 is not out of the question by the end of August.

Fresh 50 percent lean trimmings originate from finished cattle and are trading at their steadiest state in several years with this week’s price near $73 per hundredweight which is in line with the five year average price. The price of fresh 50’s is expected to remain steady in the near term.

OUTLOOK: August is now the nearby contract for feeder cattle which means it is leading the way for calves and feeder cattle trading at local sale barns. Prices at local auction markets this week were unevenly steady compared to a week ago for steers and heifers. Using the weekly weighted average prices for Tennessee, some weight classes witnessed higher prices while the weight classes on either side of them may have resulted in lower prices or steady prices compared to the previous week’s weighted average price.

The unevenness in local prices could be the result of gyrations in the futures market or quality differences in cattle from one week to the next. USDA Market News reports are useful when trying to get a general idea of what cattle are worth. However, simply sorting cattle into weight classes by frame and muscling do not always tell the full story.

Similarly, the reports provide a method of comment such as thin, fleshy, full, value added, etc. which improves the value of the information. However, nearly every spectrum that is used to describe cattle is continuous and not discrete.

Thus, a group of hardened calves that need a few groceries but that would not qualify as thin will generally bring a higher price than the same weight calves that just came off the cow and are carrying good flesh yet they both may fit in the same description on a report. This means quality differences from one week to the next can greatly influence the price and that comparing the same weight class from one week to the next is not always as straight forward as it seems.

Futures contracts on the other hand have a consistent description and thus represent the same type and quality of cattle at all times. The August contract has gained about $10 per hundredweight since the middle of May which was near the contract low.

Alternatively, the August contract remains about $12 lower than the contract high established in November of 2017. Hindsight shows hedging opportunities, but the recent surge in prices may be enough to result in positive margins.

Capture3

ASK ANDREW, TN THINK TANK: A question came in this week regarding pasture rental rates and rental rates for grazing cover crops. USDA-NASS publishes county rental rate estimates every other year which can be found online. For Tennessee, rental rates are more easily accessed in a University of Tennessee publication. As it relates to rental agreements for cover crops, the key to developing this rate is to know what it costs to put in the cover crop and factor in an acceptable return. A person could also base cover crop lease rates on gain if calves are grazing or they could use a dollar per head per day for calves or cows. The key to using a per head per day rate is maintaining an acceptable stocking rate to achieve good utilization but also to maintain the integrity of the cover crop.

Please send questions and comments to agriff14@utk.edu or send a letter to Andrew P. Griffith, University of Tennessee, 314B Morgan Hall, 2621 Morgan Circle, Knoxville, TN 37996.

FRIDAY’S FUTURES MARKET CLOSING PRICES: Friday’s closing prices were as follows: Live/fed cattle –June $110.03 +1.65; August $105.78 +1.63; October $108.20 +1.05; Feeder cattle –August $147.28 +1.20; September $148.43 +0.88; October $148.35 +0.30; November $148.50 +0.28; July corn closed at $3.78 up $0.02 from Thursday.

Capture

Comments

Restricted HTML

  • Allowed HTML tags: <a href hreflang> <em> <strong> <cite> <blockquote cite> <code> <ul type> <ol start type> <li> <dl> <dt> <dd> <h2 id> <h3 id> <h4 id> <h5 id> <h6 id>
  • Lines and paragraphs break automatically.
  • Web page addresses and email addresses turn into links automatically.
5 + 0 =
Solve this simple math problem and enter the result. E.g. for 1+3, enter 4.
Submitted by Stella neles on Mon, 06/11/2018 - 16:23

I have never taught that Dr Izibili could ever get my HIV AIDS VIRUS cured with his herbal medicine,, Email: drizibilispellhome@gmail.com
you can follow Dr Izibili on WhatsApp +2349027109631 for quick response
product.despite all these happening to me. I always spend a lot to buy HIV drugs from hospital and taking some several medications but no relieve until one day i was just browsing on the internet when i came across a great post of ! Williams Fran-ca who truly said that she was been diagnose with HIV and was healed that very week through the help of these great powerful healing spell doctor. sometime i really wonder why people called him Dr Izibili, i never knew it was all because of the great and perfect work that he has been doing that is causing all this. so i quickly contacted him and he ask me some few questions and he said a thing i will never forget that anyone who contacted him is always getting his or her healing in just 6 hours after doing all he ask you so i was amazed all the time i heard that from him ,so i did all things only to see that at the very day which he said i will be healed all the strength that has left me before rush back and i became very strong and healthy this disease almost kills my life all because of me. so i rush to hospital for the final test. So the doctor said i am HIV negative i am very amazed and happy about the healing Dr Izibili gave to me from the ancient part of Africa ,with a strong herbal concoction. if you are infected with any disease like HIV, AIDS, CANCER,HERPES SIMPLEX VIRUS, or any other disease you can also be happy like me by contacting..... Name: Dr Izibili What apps Number: Email: I“m given you 100% grantee, as soon as you have getting in touch with Dr Izibilil your problems will be solved accurately. Thanks..

Submitted by Lisa Joy on Tue, 06/12/2018 - 18:55

OMG!!! I am so proud and happy to be out here sharing your work Dr. Sam. I just can't believe this now my ex Husband is really back to me on his knees presenting a ruby rose begging me to take him back and he was feeling regretful and sorry for leaving me and for causing me pains after the divorce which occurred last year. And this whole miracle happened after i ordered an urgent 24hours Dr. Sam powerful spell which he cast on me and my husband. Sir I am the happiest woman today in this whole wide world. Dr. Sam you really did it..Yes.. Its a miracle and everlasting pleasure and cheerfulness for me and my family today.. I am so happy now and i dont know how much to convey my thankfulness and appreciation to you sir. And to the whole world, contact him if you need urgent help now because its guaranteed that he will help you. Email him (Supremespellcast@gmail.com Or Supremespellcast@yahoo.com) His web page https://supremespellcast.blogspot.com or ((WhatsApp him +2347087462033))

Submitted by Josef Lewis on Thu, 06/14/2018 - 07:48

Good-day, I'm Josef Lewis. A reputable, legitimate & accredited lender. We give out loan of all kinds in a very fast and easy way, Personal Loan, Car Loan, Home Loan, Student Loan, Business Loan, Inventor loan, Debt Consolidation. etc

Get approved for a business or personal loans today and get funds within same week of application. These personal loans can be approved regardless of your credit and there are lots of happy customers to back up this claim. But you won’t only get the personal loan you need; you will get the cheapest one. This is our promise: We guarantee The lowest rate for all loans with free collateral benefits.

We strive to leave a positive lasting impression by exceeding the expectations of my customers in everything I do. Our goal is to treat you with dignity and respect while providing the highest quality service in a timely manner. No social security Number required and no credit check required, 100% Guaranteed. Kindly respond immediately using the details below if interested in a loan and be free of scams..

Email: progresiveloan@yahoo.com
Call/Text +1(603) 786-7565 thanks

Submitted by Cherry Lugard on Thu, 06/14/2018 - 18:47

Hi Friends Dr Sam is the best spell caster to help fix your relationship problem
Read my testimony and contact him now: Supremespellcast@gmail.com

I never believed in spell casting but After 6 years of dating my ex-lover she broke up with me, I still imagine how Dr. Sam brought my ex-lover back to me in just 48 hours. No one could have ever made me believe that there is a real spell caster that really works. Am Cherry by name, I want to quickly tell the world that there is a real online spell caster that is powerful and genuine, His name is Dr. Sam, He helped me recently to reunite my relationship with my ex-lover who left me, When I contacted Dr. Sam he cast a love spell for me and my ex-lover who said she doesn't have anything to do with me again called me and started begging me. She is back now with so much love and caring. today I am glad to let you all know that this spell caster has the powers of bringing lovers back. because I am now happy with my lover, and the most surprising, is that our love is very strong, every day is happiness and joy. and there is nothing like been with the woman you love. I am so happy my love is back to me with the help of Dr. Sam if you have similar problem or you want to fix your broken relationship, stop divorce, get your ex back, get your divorce wife or husband back, I will advise you to contact him ,he is there to help you and put a smile on your face ask he did to me and others. his email: (Supremespellcast@gmail.com Or Supremespellcast@yahoo.com) His web page https://supremespellcast.blogspot.com or (WhatsApp him +2347087462033)

Submitted by Cherry Lugard on Thu, 06/14/2018 - 19:21

Hi Friends Dr Sam is the best spell caster to help fix your relationship problem
Read my testimony and contact him now: Supremespellcast@gmail.com

I never believed in spell casting but After 6 years of dating my ex-lover she broke up with me, I still imagine how Dr. Sam brought my ex-lover back to me in just 48 hours. No one could have ever made me believe that there is a real spell caster that really works. Am Cherry by name, I want to quickly tell the world that there is a real online spell caster that is powerful and genuine, His name is Dr. Sam, He helped me recently to reunite my relationship with my ex-lover who left me, When I contacted Dr. Sam he cast a love spell for me and my ex-lover who said she doesn't have anything to do with me again called me and started begging me. She is back now with so much love and caring. today I am glad to let you all know that this spell caster has the powers of bringing lovers back. because I am now happy with my lover, and the most surprising, is that our love is very strong, every day is happiness and joy. and there is nothing like been with the woman you love. I am so happy my love is back to me with the help of Dr. Sam if you have similar problem or you want to fix your broken relationship, stop divorce, get your ex back, get your divorce wife or husband back, I will advise you to contact him ,he is there to help you and put a smile on your face ask he did to me and others. his email: (Supremespellcast@gmail.com Or Supremespellcast@yahoo.com) His web page https://supremespellcast.blogspot.com or (WhatsApp him +2347087462033)

Submitted by Lisa Joy on Sat, 06/16/2018 - 20:42

OMG!!! I am so proud and happy to be out here sharing your work Dr. Sam. I just can't believe this now my ex Husband is really back to me on his knees presenting a ruby rose to beg me to take him back and he was feeling regretful and sorry for leaving me and for causing me pains after the divorce which occurred last year. And this whole miracle happened after I ordered an urgent 24hours Dr. Sam powerful spell which he cast on me and my husband. Sir, I am the happiest woman today in this whole wide world. Dr. Sam, you really did it..Yes.. Its a miracle and everlasting pleasure and cheerfulness for me and my family today.. I am so happy now and i don't know how much to convey my thankfulness and appreciation to you sir. And to the whole world, contact him if you need urgent help now because it's guaranteed that he will help you. Email him (Supremespellcast@gmail.com Or Supremespellcast@yahoo.com) com you can visit his Website Via> http://supremespellcast.website2.me Or his blog> https://supremespellcast.blogspot.com Add him up (WhatsApp him +2347087462033)