Cattle put in a mixed performance this week, but the performance was enough to push all of the live cattle and feeder cattle contracts to new all time contract highs. It is nothing short of amazing that cattle can keep running higher, but this is the ultimate in show downs as tight supplies and the expectation of continued tight supplies lingers for the next year battles against demand, and so far domestic demand is remaining strong while export demand struggles.
Cattle started the week higher with support coming from last week’s strong cash trade, which had cash bids up $1 to $2 higher at $183 to $185. A sloppy corn market added support to the feeders as did strong demand as feedlots are aggressively buying replacement calves in an attempt to keep feedlots full. Tight supplies and the expectation supplies will only get tighter added support.
Selling pressure dominated the cattle markets Tuesday with most of the months struggling to hold gains. On a positive note, cattle did not see big losses Tuesday, just a minor setback due to profit taking. Live cattle were pressured by a light cash trade. In their Sept Crop Production report, USDA estimated 2023 Q3 beef production down 60 million pounds while Q4 production was increased 20 million pounds, which left 2023 production at 26.941 billion pounds. 2024 beef production remained unchanged at 25.165 billion pounds.
Profit taking and economic concerns pressured the cattle midweek which also led to the market triggering computer generated sell orders which accelerated the selling pressure. Losses were kept in check by USDA’s friendly Crop Production report. Feeder cattle were pressured by a stronger grain complex.
Strength returned to the cattle market Thursday with all of the contracts pushing sharply higher. Early support spilled over from a sloppy grains complex. Light support was also due to Tuesday’s Crop Production report which continues to show decreasing beef production. Grains were kept in check early from economic concerns as inflation continues to remain a thorn in the side of the US economy. The increase in the CPI estimates might be enough to make the Fed increase rates at next week’s meeting. Cash activity continues to be too light to establish direction. Last week’s beef export sales pace was at 6,220 MT, a new low for the year. Year to date beef shipments are 12% behind last year’s pace.
As of Sept 10, pasture range conditions were estimated at 33% g/e, 28% fair, and 39% p/vp, a drop of 3% from last week.
For the week, Oct live cattle were at $186.925 up $3.70. Sept feeder cattle were at $257.375 up $2.025.