Sort & Cull

It may be frustrating for you to know the U.S. beef cowherd sits at a historic low, but over the last several weeks cash cattle prices have moved lower as packers have regained the upper hand in the fed cash cattle market.

Slowly, but strategically, over many weeks, packers have gradually built up supply around themselves. Now that they're operating slower processing speeds, they are working the market lower every week. For instance, just last week Southern live cattle traded at mostly $224 to $225, which is $4.00 to $5.00 lower than the previous week's weighted average. Northern dressed cattle traded at mostly $368, which is $10.00 lower than the previous week's weighted average. But last week's negotiated cash cattle trade totaled 52,528 head -- of which 69% (35,096 head) were committed to the nearby delivery while the remaining 31% (17,432 head) were committed to the deferred delivery option.

Given that the market is heading into the long, Fourth of July weekend, where slaughter speeds will be drastically reduced for the holiday, it's likely this week fed cash cattle prices will be lower again. Until packers are in a position where they need more cattle as opposed to simply buying to remain comfortably stocked for the weeks to come, a lower trend should be anticipated.

But even though fed cash cattle have been trading lower, feeder cattle sales in the countryside have remained red hot. And next week Superior Livestock Auction will host their Week in the Rockies Video Auction, which will again give insight into what we can expect feeder cattle prices to be later this fall.

So, while you're celebrating the birthday of our great nation this upcoming week, send up a couple of Hail Mary prayers that the futures complex holds strong as cow-calf producers will be closely watching what the video sales do next week. Happy Fourth of July, friends!

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

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