October feeder cattle closed up fractionally on the day today and well off the lows from earlier in the session. The volume on the day was slightly lower from the previous trading day as I suspect traders are just waiting for the report to come out tomorrow after the close and reposition on Monday. According to Steiner Consulting Group the expectations are as follows:
- The July Cattle on Feed pre-report estimates show that analysts are expecting the July 1 Cattle on feed to be marginally above a year ago at 100.1 or 11.716 million head. If the COF pre-report estimate holds it will be the second highest on record for the month of July, only behind 2019 (11.728 million head). Analysts are expecting June cattle placements to be 94.7% of a year ago down to 1.581 million head which would be the lowest for the month of June since 2016. Cattle marketings are expected to be higher in June at 102.0% or 2.062 million head, the highest for June in over a decade.
The USDA estimated cattle slaughter numbers came in at 124,000 head yesterday. The total for the week so far is now at 340,000 which is down from 377,000 from last week but up from 351,000 a year ago. In my opinion, the market is still trying to absorb the potential for extreme heat in the central and southern plains. I’ve been hearing that there is some liquidation of non-Fed cattle slaughter is still possible under this scenario but that will also cause lower weights and lower beef production.
Boxed beef closed at 270.53 for the day which was down $2.04 from the previous day. In the cash markets, I’ve been hearing that the 5-area weighted average price was 139.94 which was down from 140.74.