Call the Market

Oversimplifying the market's dynamic ebbs and flows can be misleading, but given that it is the middle of July, it seems almost predictable that the market would waver and show some softness following its recent springtime high.

But as always, like I said, it can be dangerous to oversimplify the market's behavior, as a critical eye can only catch what it's actively looking for. So, I think it's time to ask ourselves: What's the market trying to tell us right now? Is this a blip in the cattle market's rally that will later be chalked up to nothing more than a seasonal decline? Or is something larger at play here, slowly demanding our attention one day and lower close at a time?

Right before the Fourth of July holiday, both the live cattle and feeder cattle contracts began to trade lower as fatigue seemed to settle into the futures market. With boxed beef prices waning and fed cash cattle prices softening simultaneously, the contracts have traded lower ever since.

I personally sit in the camp that believes this is a seasonal downturn and that support and stability will be found again in the coming weeks and months. What I can't confidently tell you is whether the high of this cycle has been made yet. It seems almost drunken to think that prices could outdo what we saw this spring -- but if you think back to 2025 and the prices that the market accomplished then, we said the same thing.

But when I turn off my computer at the end of the day, the market's turn of events has pressed my mind to consider a couple of things.

First, if I was a producer who hadn't marketed their calves yet, I would be thinking heavily about what my marketing strategy was going to be. What we've seen thus far from the video sales offered this late spring and early summer has been nothing short of incredible. A month ago at Superior's Corn Belt Classic, seeing feeder steers sell anywhere from $2,700 to $3,000 per head was the norm. The market's biggest year-over-year advancement was on those weighing 500 to 540 pounds, which traded $158.47/cwt more than last year's prices and averaged $557.25/cwt. The narrowest year-over-year advancement was seen on the heavier weighted steers weighing 750 to 790 pounds, which saw a $88.75/cwt advancement compared to last year's prices and averaged $417.00/cwt. Like I said, the prices were almost unbelievable, and even though prices have softened slightly in recent weeks, this market is still red hot.

Secondly, if this isn't a mid-summer blip, and we have seen the highs of this cycle, does that change anything for your operation moving forward? Does it change anything in the next month, three months, six months or year from now?

And last, but certainly not least, I recently listened to a podcast by Ranchonomics, hosted by John Haskell with Ranch Right, where he spoke in great detail about the difference between market inflation and true asset appreciation. If the market has reached its peak for this cycle, have we done all that we can do to add as much appreciation to the commodity we hold? And have we set our business up to weather the downturn?

You can access the podcast mentioned above here: https://podcasts.apple.com/….

Truth be told, none of us know what's coming down the pike in the next month, three months or a year from now. All we can do is take the assets we have and best position them for whatever trials lie ahead, while staying active and diligent in the fight for profitability.

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

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