![]() The decline of forward contracts pushes more cattle into the cash market where they are sold either as grid or negotiated prices. The total number of forward contracted cattle has declined as deferred futures and packer basis bids fail to provide sellers a profit margin for feeding. Packers will always be willing to take a price risk off the producer’s plate in return for an extra margin. The driver in forward purchases of cattle will always be forward sales of beef. Basis levels will move up and down as processors want to add to forward contracts or not. The report is also reflective of the current status of fed cattle offerings in each area.įorward Cattle Contracts: Forward contracts will always bear some relationship to the corresponding futures month closest to the delivery month for the cattle. The Weekly Steer and Heifer Grading Report is indicative of regional supplies of choice and prime cattle and often is determinative of regional differences is live price. The combined steer and heifer weights can easily be influenced when the proportion of steers to heifers in the weekly slaughter changes. Carcass weights will be fundamental in determining total beef production. The latest report shows carcass weights at 862# up 2# from prior week and 2# under last year. The report is published each Tuesday and includes the previous week’s change in carcass weights and quality grading. The Comprehensive Fed Cattle Weekly Report offers the most current information on the current status of fed cattle being harvested. Beef producers are able to measure the marketing price for their cattle compared to the national averages. The report summarizes the distributed price levels for each category of sale such as Negotiated/Formula/Forward Contracts. On Tuesday of each week, USDA releases a weighted average price report for all cattle sold the previous week. Until the CME changes the construction of the contract, expect inadequate correlation between cash and futures.īenchmarking. The threat of delivery prevents longs from entering the market. There appears to be little reason for expect futures prices in the August contract to move to a mid point between southern and northern sales. ![]() Some traders are developing the view that prices are headed higher into year end. Prices were higher catching up with cash prices that touched $190 in the north. The thin line between cattle placed in a feedyard for growing or finishing is often confusing and sometimes the cattle owner or feedlot operator does not provide a firm designation but makes the decision later.Ĭattle Futures. The current fed supplies and slaughter levels do not fit with USDA placement data from earlier this year and late last year causing some thoughts that dry conditions late last year caused some double counting as many cattle entered grow yard operations. The small slaughter volume is primarily caused by the short supplies at the nation’s feedyards. ![]() ![]() The upcoming weeks will continue smaller slaughter levels but this may possibly be the bottom weekly level. The summer heat wave is doing little to help beef demand but cooler temperatures are on the horizon for August. The slaughter reduction from last year is 35,000 head. This represents one of the lowest non-holiday slaughter weeks of the year. The slaughter this past week was 613,000 down 6,000 head from the previous week. In the south, a few more cattle are being sold flat dressed, negotiated grid, and live delivered. Southern sales were mainly at $180 on light volumes with higher volumes of sales going unreported. Northern live sales were mainly at $188-$189 with outside tops of $190.50. ![]()
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