Negotiated cash fed cattle trade continued lower on Thursday at $106/cwt. in the western Corn Belt, which was $2-$4 less than last week. Live sales in other regions on Wednesday were mainly $3 less than last week at $107.
Choice boxed beef cutout value was 58¢ lower Thursday afternoon at $191.75/cwt. Select was 81¢ lower at $188.66.
Cattle futures spent most of the day under pressure, but reversed directions by the closing bell, apparently the product of short covering.
Except for 7¢ lower at the back, Live Cattle futures closed an average of 63¢ higher (30¢ to 92¢ higher).
After 2¢ lower in spot Aug, Feeder Cattle futures closed an average of 58¢ higher across a broad range (7¢ to 87¢ higher).
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Major U.S. financial indices edged lower on Thursday amid little economic news.
The Dow Jones Industrial Average closed 28 points lower. The S&P 500 closed 5 points lower. The NASDAQ closed 7 points lower.
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Given the hefty level of feedlot placements in recent months, perhaps more than usual, plenty of folks will pore over the monthly Cattle on Feed report to be published by USDA on Friday. Heavyweight placements in July will likely attract much of the attention.
Pre-report estimates are all over the board with plenty of variables.
In his market comments last week, David Anderson, Extension livestock economist with Texas A&M University, noted that placement estimates range from less than 1% higher to an increase of more than 10%.
“Most years, July placements exceed June placements. Only in 2005 and 2007 were July placements smaller than in June in recent years,” Anderson says. “July placements would have to be up a whopping 12.6% over a year ago to equal June’s placements.”
Among the logical reasons for a year-to-year increase in July placements, Anderson cites:
Increasing reports of Corn Belt feeders buying calves, and perhaps the need for some of them to free up bin space ahead of what appear to be another near-record corn crop.
Continued drought in the Northern Plains, pushing cattle to market earlier.
Profit opportunities continued for cattle placed in July.
On the other hand, Anderson says, “It may also be that the large placements in May and June pulled some cattle ahead and out of July placements…Placement levels so far this year would suggest the increase in feeder cattle over last year have already been placed, limiting supplies to lighter weight calves and heifers.”
Anderson estimates July placements at 2.5% more than a year ago.