Standoff: Feedyards and Packers Dig In
All regions saw an extremely light test of cash cattle prices for the week. Packers are stalling and refusing to swallow the bitter pill of higher prices again as margins are negative for the third consecutive week. Feedyards are current in their marketings and show lists are not large so most managers are showing patience.
A few cattle traded in the North at $294 to $295 dressed while in the South a few cattle traded at $179 per cwt., $1 lower.
Next week’s cattle market action could prove quite volatile after producers and packers sustained their weekly standoff through Friday’s futures session. Live cattle futures ended Friday narrowly mixed, with nearby August edging up 10 cents to $178.15; that represented a weekly decline of $1.875. Feeder futures rallied in response to fresh grain/soy weakness. August feeders rose 95 cents on the day to $245.60, thereby marking a weekly dip of 42.5 cents.
Feeder cattle traded mixed from $3 lower to $4 higher. Calves sold from $2 lower to $2 higher.
Wholesale beef prices saw minimal change for the week. Choice boxed beef closed Friday at $302, down $1.46 per cwt. Select boxed beef closed Friday at $277.54 per cwt., up 81 cents for the week.
Packer buyers can plead poverty, pointing to the approximate $40 drop in choice beef values from their June peak, but producers can just as easily point to their relatively elevated nature, as well as bears’ inability to force choice cutout below $300.00 this week.
Packers will gain access to contracted cattle next Tuesday (8/1). Conversely, grocers will likely start actively pursuing beef for Labor Day features next week.
