Sort & Cull

Over the Fourth of July weekend, we spent an evening with some close friends that have two phenomenal kids. Their oldest son, Cannon, is a bold and blazing six-year-old who could sell ice to an Eskimo and doesn't think too fondly of the notion of naptime. Holly, their four-year-old daughter, is the complete opposite. Kind and gentle, she's soft-spoken and is one who truly wears her heart on her shirt sleeve.

After seeing our friends logically parent each of the two children completely differently, it dawned on me that they were simply raising two very different breeds. Cannon is like a Blue Heeler dog, and sweet Holly is a border collie.

Ranchers are accustomed to the difference of the two. Heelers are as loyal as dogs can come, but will -- without thinking twice -- tell you how stupid you are for trying to move yearlings in the heat of the day and gladly go lay in the shade while you run back and forth trying to finish your not-so-thought-out project. Border collies, on the other hand, are smarter than most well-educated law-students, have a natural instinct to serve their master regardless of the circumstance, but are a much more timid and they take half the discipline.

Oddly enough, given the vast difference that has recently developed in the cash and live cattle contracts, it feels like the two markets are different breeds. The cash cattle market is chiseling away, each and every week, to lower prices; meanwhile, the live cattle contracts have suddenly flipped their switch and think that amid a surplus of cattle, heavier carcass weights -- and lo-and-behold, through the dreaded month of July -- it's a good idea to rally.

July is a tough month for fat cattle. Numbers are abundant as seasonally this is the market's peak for readily available fat cattle. Three out of the four summer meat holidays are over with (Memorial Day, Father's Day and Fourth of July) and it's a long (hot) time before the first week of September and the three-day Labor Day weekend cookouts. And, because July isn't a traded contract, the market will be subject to immense volatility until the cash market and board have to converge again when the August live cattle contract expires on Aug. 31.

The vast differences in the two markets is bothersome. As much as I'd like to say that the cattle market is back to normal, getting through the dreaded month of July has to happen first.

Knowing your two different markets and how to treat them accordingly will help you bring out the best they have to offer.

ShayLe Stewart can be reached at shayLe.stewart@dtn.com

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