Sort & Cull

This year has been far from normal, with record-breaking prices already set in the calendar year for both the live cattle and feeder cattle markets, but if there's one seasonality that rung true this year, it's been that the dog days of summer have pressured the cattle complex.

Between relentless boxed beef demand, continued support in the fed cash cattle market from packers and blazing hot feeder cattle prices, this year's market has been like nothing else. But the market's momentum stalled last week as both boxed beef prices and fed cash cattle prices both endured some seasonal pressure.

Last week both choice and select prices fell lower and consumer demand drew back following the Fourth of July holiday. Last week, choice cuts averaged $324.78 (down $5.18 from the previous week's weighted average) and select cuts averaged $303.73 (down $1.85 from the previous week's weighted average). Fed cash cattle prices also followed suit as Southern live cattle traded at mostly $188, which is $2 to $4 lower than the previous week's weighted average, and Northern dressed cattle traded at mostly $312, which is $2 lower than the previous week's weighted average.

The feeder cattle complex is the oddity in this equation as overall, the CME feeder cattle index continues to prove that demand is smoking hot for feeder cattle. Last Friday, the CME feeder cattle index closed at $261.04 -- a threshold never seen before last week. Yes, some sale barns saw lower prices in their rings last week as hot weather and some regional signs of drought pressured some local markets, but overall, the fact remains that feeder cattle supplies are thin, and buyers are having to scrap against one another to buy the cattle that they desire.

It's likely that during the course of the next two to three weeks that seasonal, summer-time pressure will consume the live cattle market as consumer demand may not perk back up until Labor Day, but the feeder cattle market will likely remain the market's wild card. Monitoring drought, how much the fed cattle market regresses, and processing speeds as they affect feedlot currentness remain top priorities in the weeks ahead.

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

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