Cash cattle were mostly steady over the holiday shortened week. Live sales in Texas and Kansas were at $117/cwt. In Nebraka, live trade was too light to call a trend but dressed sales were called at $186-$188/cwt. Cattle volume at the Oklahoma City auction was light due to the holiday. Feeder cattle were firm and calf sales were too limited to call a trend. No reports for Mississippi markets this week.
Live cattle futures ended the week mixed, but mostly even compared to last Friday. Nearby contracts were down about $1/cwt and more deferred contracts were up about the same amount. A sharp decline on Monday was caused by negative outside market pressure – notably a strong U.S. dollar and weakness in equity markets. Tuesday experienced a small comeback. Markets were closed for the Independence holiday and when they re-opened on Thursday, concern about limited grilling demand due to the heat provided a bearish tone. Much like the corn crop, pasture conditions continue to worsen, which will likely push cattle to market sooner than normal – similar to last summer, with the major difference being that this year’s drought is much more widespread than in 2011. This is a contributing factor to the higher prices on more deferred live cattle futures prices. Despite this, cost of gain of cattle placed into feedlots is not letting up. Thus, feeder cattle futures were overwhelmed with soaring corn prices and no support from live cattle futures nor cash cattle and beef.
Corn prices continued to sky rocket this week on growing concerns about the deteriorating crop. Friday brought about some relief as a poor jobs report weighed on outside markets. Still, the amount of corn rated good and excellent as of July 1 fell another eight percentage points from the previous week to 48%. USDA will release their monthly supply and demand report on July 11 and I’ve yet to see a pre-report yield estimate anywhere near the 166 bushels per acre that has been published the last two months. The bump in acres seen in last Friday’s Acreage report likely will not overcome the expected loss in yields.
Wholesale beef prices slid lower this week. Choice wholesale beef finished with a weekly average of $193.52/cwt, down $3.06. Select ended the week at $176.38/cwt, down $3.42. The spread between Choice and Select beef has held mostly steady the past few weeks and is currently at $17.14/cwt.