What Slump? Cattle Higher; Corn Too!
Mid-July prices trending higher is a sure sign of a bull market and cattle feeders are clearly in the driver’s seat. Beef packers want to obtain inventory but don’t want to appear too aggressive in fear of driving prices even higher. Cowboys were already turning down bids that seemed unthinkable a month ago.
Even with the higher prices, packers continued to operate on positive margins last week. They gave up some margin this week and are poised to do so again next week.
Cattle in the North traded at $183 to $186 live and $291 to $295 dressed, $1 to $3 higher than last week. Cattle in the South traded at $178, steady with last week.
The five-area average for Monday through Thursday reached $182.99, thereby topping the comparable week-prior result by $2.29, although the bulk of Thursday’s trading apparently occurred in Iowa, with few changing hands in the TX-OK, Kansas or Nebraska regions.
Feeder cattle traded in large volumes at $4 to $9 higher can calves traded mostly $2 to $6 higher.
At the CME, sustained cash market strength sparked a $3.275 gain in nearby August live cattle futures to a contract-high close at $180.175. That marked a weekly rise of $3.175. August feeder futures ended the week at $246.65, which represented daily and weekly gains of $1.65, and $1.225, respectively.
Wholesale beef slipped lower for a fourth consecutive week. Choice boxed beef closed Friday at $305.94 per cwt., down $10.96 for the week. Choice beef peaked at $343.09 on June 16. Select boxed beef closed at $276.61 per cwt., down $9.02 for the week.
The latest USDA reading on steer dressed weights inched up one pound from the week prior to 884 pounds per head. History indicates the usual summer-fall rise in cattle weights has begun, due largely to reduced supplies of calf-fed yearlings (placed last fall) in the slaughter mix. Still, the latest weight readings, as well as the choice-select beef price spread remaining quite wide at $28.37, point to persistently tight supplies of high-quality cattle and beef.
