Negotiated cash fed cattle prices last week were mostly $4 higher on a live basis in the Southern Plains at $104/cwt., $3 higher in the Northern Plains at $106 and $2.50-$4.00 higher in the western Corn Belt at $106.50-$107.00. Dressed trade was $2 higher in Nebraska at $165 and $2-$7 higher in the western Corn Belt at $165-$170.
Through Thursday, the five-area direct weighted average steer price was $104.49/cwt. on a live basis, which was $3.21 more than the previous week, and just 91¢ less than the prior year, keeping in mind that the Aug. 9 Tyson fire last year slammed cattle markets. In the beef, the weighted average steer price was $168.06, which was $4.87 more than the previous week, and $2.40 less than the prior year.
Cattle futures closed mixed to end the week, with Feeder Cattle pressured the most.
Live Cattle futures closed unchanged to narrowly mixed (17¢ lower to 55¢ higher in spot Aug).
Feeder Cattle futures closed an average of 71¢ lower (40¢ to $1.05 lower).
Choice boxed beef cutout value was $3.29 higher Friday afternoon at $214.24/cwt. Select was $1.88 higher at $199.29.
Estimated total cattle slaughter last week of 640,000 was 7,000 head more than the previous week’s estimate, but 13,000 fewer than the same week a year earlier. Year-to-date estimated total cattle slaughter is 5.1% less than the same period last year at 19.69 million head. Estimated year-to-date total beef production is 2.4% less at 16.27 billion lbs.
Corn and soybean futures closed slightly lower Friday on likely profit taking from the previous session’s spike higher.
Corn futures closed fractionally mixed.
Soybean futures closed mostly 1¢ to 3¢ lower.
Major U.S. financial indices closed narrowly mixed on Friday. Positive news included retail sales increasing 1.2% month to month in July, according to the U.S. Census Bureau. On the other hand, Congressional stalemate over additional coronavirus economic aid applied pressure.
The Dow Jones Industrial Average closed 34 points higher. The S&P 500 closed fractionally lower. The NASDAQ closed 23 points lower.
Stronger Cattle futures the past couple of weeks are offering profitable hedging opportunities for many cow-calf producers, says Andrew P. Griffith, agricultural economist at the University of Tennessee, in his weekly market comments.
Although still lower than the contract higher of $156, Griffith points out the August Feeder Cattle contract is $28 higher since the first week of April, at levels last seen toward the end of February.
“It is always a positive thing to hedge a profit on cattle. It is even more positive to be presented with an opportunity to hedge a profit when prices have been extremely volatile and at large losses for several months,” Griffith explains. “The reason many people will not use price risk management in this environment is because they hold out hope that prices will go higher. Prices could continue to increase, but they could also decrease. There is nothing wrong with hedging a profit, and there are methods available to set a price floor and leaving the top side of the market open.”