Market reports for July 17, 2015
Compared to last week, a light test of yearlings and calves sold steady to 5.00 lower as extremely hot temperatures across much of the country help to curtail receipts. Temperatures for the most part were in the 90s with heat indexes reaching over 100 degrees. Few auctions noted cattle carrying long hair and susceptible to heat stress sold at a discount. Calves throughout the Southeast traded mostly 3.00-10.00 lower. Demand remains very good for yearling cattle as abundant feed supplies and a light supply of feeders available is helping to keep the cash feeder market a full 10.00 above the nearby feeder cattle futures. Feeder cattle futures had strong gains on Tuesday of over 3.00 and modest gains on Wednesday showing some footing. Then rebounding corn prices on Thursday rocked feeder cattle futures back on their heels after the previous gains. Western Video Market held a nice three-day sale this week selling over 92,500 head of feeder cattle based out of Reno, Nev., with over 70 percent of the consignments coming from areas west of the Rockies. One consignment of 225 head of fancy Nevada steer calves weighing 435 lbs sold for 373.00 for November delivery and 700 head of yearling steers from the North Central States weighing 825 pounds for August delivery sold for a weighted average price of 221.02. But in most cases fed cattle trade and boxed-beef sales are laboring in the dog days of summer with the extreme heat this week could spell trouble for the fed cattle trade. Choice boxed-beef has had a melt down over the past 13 trading sessions closing lower in 12 of them for a total loss of near 20.00 on Choice product, closing Friday at 233.30 down .65 cents. On Wednesday, heavy movement of 246 total loads led to the largest single day volume movement since October 1, 2014. We are in a period which is known for its lack of demand and falling beef prices. Hopefully the worst has come and gone for boxed-beef as smoldering summer heat can be unbearable for summer grilling as prices attempt to carve out its summer lows. The meat sector at this time seems to have plenty of pounds to satisfy the market both here and abroad. Hog futures have seen sharp swings over the past week with increasing slaughter levels going forward into fall as hog slaughter is running 11.9 percent higher than last year. There are also ample poultry supplies as chick placements are up and larger than last year by about 2.5 percent. Corn crop conditions remain at 69 percent rated good to excellent with 9 percent rated poor to very poor compared to 8 percent last week. Uneasiness remains in the grains as areas that have rained soaked crops offer very little hope for producing an average yield which should bear watching for corn prices going forward. The old saying “rain makes grain” is true more often than not; it will likely discount the negative impact on too much rain in key areas. The debate going forward: Will strong yields in key areas offset low yields in other areas? Negotiated cash trade Friday afternoon in Kansas and Northern Plains was mostly 2.00 lower on live sales at 148.00. Auction volume included 49 percent weighing over 600 pounds and 38 percent heifers.
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I want to address a couple of issues in this week’s editor’s note.