Cattle sold out of Southern feedyards at $95 to $96 this week, $1 higher. Cattle in the North traded at $97 to $98, with dressed sales from $157 to $160, steady to $2 higher. Fewer forward contracts this week forced packers to seek more cattle through the spot market. Cattle feeders holding hedged cattle are finding a strong negative basis of $5 to $7 per cwt., compared with the positive basis of $3 to $5 last July.
USDA estimated weekly cattle slaughter at 650,000 head, down 1.1% from last week and down 0.8% from last year. Live cattle weights were reported at 1,366 pounds, down 2 pounds from last week but up 36 pounds from last year. Weekly beef production was reported at 538.4 million pounds, down 1.1% from last week but up 2.1% from last year.
August Live cattle settled unchanged at $103.275, while deferred contracts posted modest price gains. Feeder cattle finished slightly higher. For the week, October live cattle futures firmed $2.30 and October feeders rallied $5.10.
Boxed beef cutout values were lower on the week. Choice closed Friday at $200.47 per cwt., $4.03 lower than last Friday. Select closed at $190.31 per cwt., versus $194.29 last Friday.
Steers and heifers sold uneven at auctions this week. South Central states prices were $3 to $4 higher while Southeast and North Central states were $3 lower to $1 higher. Agricultural Marketing Service reporters saw a big increase in North Central prices last week “due to some annual specials that bring high quality reputation one-iron brand strings of cattle to town.”
AMS also noted pasture and range conditions are deteriorating. “For the first time this year over 50% of the nation is in some sort of drought designation. The last time that has occurred was the week ending September 18, 2018, when the country was coming off a historical drought. Draw lines from middle of North Dakota due south to the southern tip of Texas then west to the New Mexico-Arizona border and then north. That rectangle will encompass the worst of the grazing regions in the country this week.”