By Cassie Fish, CassandraFish.com
CME cattle futures continue to trade lower, making new lows for the week and nearing, though not taking out yet, last Wednesday’s monster low. When the market rallied late last week, many thought the market had left those lows behind but here we are again.
Technically futures, which have been discount to cash all but a couple of weeks in 2015, have been in a downtrend since June and on a continuation chart since last October/November. Looking back, futures have had a few good rallies this year, $13 from the Feb low to the April high and a more modest $7 in June but the big picture points to $30 lower since late October 2014.
The futures downtrend for the last 9 months didn’t become true for cash prices until 3 months ago. Remarkably, the average negotiated cash price for the first 7 months of 2015 was $158.42. Cash prices held together extremely well until June and since then have dropped $15/cwt in 3 months. During the same time frame Oct LC dropped $17.
Oct LC are now about par to the weakest cash cattle prices in the country, reported lightly this week in the Corn Belt. There have been a few trade there from $140-143 live and $222-225 dressed. Packers are making a little more effort today at gathering some inventory, little fat cattle auctions have reported sales as high as $146 to a major packers while another major is rumored to be willing “to call” at $225 in eastern Nebraska. But these “better” prices aren’t helping futures.
If this week turns out to be another week of light volume trade then packers will forced to be more aggressive next week. Though the wind could keep blowing his way.
There are still some cattle around weighing over +1,600 pounds in spots, how many spots being the unquantifiable but key question. Not all plants have shackle space for such big cattle, even with a discount. There are rumors some plants in the Corn Belt are bought out as much as 2 weeks, whether accurate or scare tactics again it’s hard to say.
One can argue about how the market got here or how close the market is to a clean-up then a scramble rally. What is true at least for today is that the tail wagging the dog is the Corn Belt and the drag its’ weak bargaining position are having on the overall fed cattle market and cattle futures prices.
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A Handbook for Ranch Managers. In keeping with the “holistic” idea that the land, the livestock, the people and the money should be viewed as a single integrated whole: Part I deals with the management of the natural resources. Part II covers livestock production and Part III deals with the people and the money. Not only would this book make an excellent basic text for a university program in Ranch Management, no professional ranch manager’s reference bookshelf should be without it. It is a comprehensive reference manual for managing the working ranch. The information in the appendices and extensive bibliography alone is worth the price of the book.
You might also be interested in the supplement to this Handbook: Planned Grazing: A Study Guide and Reference Manual.