Live Cattle Fundamental Support
It took USDA’s office in charge of cash cattle price reporting an extra two and a half hours to release the summary of last week’s trading.
When all was said and done, they reported only 36,000 head of free market cattle traded last week. That is 57% fewer cattle than the previous week’s 83,000 sale. The average price sold was actually $151 on a live basis, steady with last week. The limited numbers we heard about late Friday afternoon were $148 in Texas.
The better than expected totals from Friday’s trade—and the 80 and 95 cent gains in choice and select boxed beef—supported today’s futures. For the coming end of week cattle sales we cannot get too excited. While beef is moving higher right now we cannot forget that the industry is about done filling orders for Labor Day weekend. Live cattle futures have some seasonal pressure into the end of the month.
This comes on top of this afternoon’s count of market ready cattle showing a net increase of 21,000 head due to last week’s unsold numbers. Assuming the next couple of weeks see some price pressure this may be an opportunity to buy for the coming tight Q4 period.
In other news Indonesia is paying the price for its move to restrict Australian cattle imports in this quarter to only 50,000 head. Their domestic beef prices are now a third higher than the government’s target price. Things are said to get even tighter when their feedlots begin to run dry in about six weeks. This is the same country that is also attempting to limit corn imports. Let’s see how that works out.