Cattle futures started mostly lower except for nearby live cattle as record high cash prices are pulling up the front end of the board verses the bearish placements number in the Cattle on Feed Report. However, feeders firmed shortly after that on lower corn and strong cash trade, plus tight numbers.
Scott Varilek, Kooima Kooima Varilek, says the record cash came even Friday afternoon after the report which is an indication of just how tight the numbers are in the country.
Cash last week in the North ranged from $306 to $315, with the dressed volume at $310-$312, up $4-$6 on the week and live sale prices were at $198-$199. Southern prices ranged from $189 to $191 live, which was up $3 to $5. So, the five-area weighted average will be another record.
“The numbers just aren’t there for the middle of June for those kinds of trades to happen is very impressive. We’re after peak demand time, you know usually we’re starting to tail off, show lists are starting to grow but we have a lot of interest in trying to sell early. So, guys are even selling some of these calves that are not ready yet,” he says.
As a result, he anticipates weights will start to drop off.
He says they aren’t sure where the 104.3% placements number came from on the USDA report, except that the record cash prices may have feedyards scrambling.
“If we look at it again and say where would all these extra placements come from, the only thing I can come up with is we do have quite a large sector of the market we’re bullish and we know how tight these numbers are, we know how long it takes to rebuild the cow herd and that’s not going to happen overnight. So, there is that anticipation that this is the best market we’ve ever had in the history of the cattle market, the highest prices. I want to be a part of it. So, you know there are empty yards and if you’re looking at an empty yard and you want some cattle in it because they’re getting very high, " he says.
Varilek adds that the higher placement numbers last fall should be starting to show up on show lists right now, but the numbers aren’t there which may indicate USDA did not get the numbers right last fall on the reports.
Hogs start mostly lower again after lower weekly closes last week and lower cash coming into the session. Varilek is not sure if the market will take a breather ahead of the end of the quarter or the Hogs and Pigs Report.
Grains are under pressure again as the markets don’t care about excessive rain in the northwestern Corn Belt and instead are focusing on the rains that fell in the Eastern Corn Belt over the weekend.
