Trade took place early this week and then slowed. Prices once again moved lower. Live cattle in the Southern Plains traded at $113/cwt on Tuesday. In Nebraska, live and dressed trade was called at $112-$113/cwt and $178-$180/cwt, respectively. In Oklahoma City, feeder steers and steer calves were $6-$8/cwt lower and all heifers were $6-$10/cwt lower. Mississippi feeders were mixed, slaughter cows were $1-$3/cwt lower, and bulls were $3-$8/cwt lower.
Live cattle futures saw some life Wednesday following news of Japan possibly loosening their import restrictions in the near future. Contracts moved at or near limit that day and were higher again on Thursday before some profit taking brought things down on Friday. While it is true that Japan is working toward opening up trade with the US for cattle under 20 months of age, given that these negotiations often move at glacial speed the actual implementation is likely many months away. Early in the week prices struggled as corn continued to move higher and cash cattle prices dropped further. This week’s trade also included some positioning ahead of Friday’s Cattle on Feed and mid-year inventory reports [for more on these click here and here]. The reports will likely be viewed as mostly neutral and the push of cattle off of grazing and into feedlots will likely pressure nearby contracts. This coupled with weak wholesale beef prices should keep cattle futures in a lull for the time being.
Feeder futures benefited from the nearby activity in the live cattle pit on Wednesday and moved higher on the day. However, corn continues to sour the trade for feeders and any gains on Wednesday were wiped out by losses on other days.
Corn continued to climb higher this week, breaking records in the process. The percentage of the crop that is rated “Poor” and “Very Poor” now excedes the amount rated “Excellent” and “Good” by 38% versus 30%, respectively. The prospect of a break in this trend does not look promising at the surface, but at some point demand will break and the skyrocketing prices will level off. It is doubtful that corn prices will experience much of a decrease though.
Boxed beef prices slipped further this week. Choice wholesale beef took a big hit again this week and finished much lower than last week with a weekly average of $182.07/cwt, down $5.26. Select ended the week at $172.05/cwt, down $1.76.