By Cassie Fish, http://cassandrafish.com 

    CME cattle futures are posting an ugly enough down day that some cattle feeders in the north sold at $310/cwt dressed, $2 cheaper than last week. With the north weakening and the south trading steady, that historically wide regional spread is finally narrowing a bit.

    Futures have made new lows for the week and are trading lower on the week and month after making new highs for the move earlier in July and in the case of August and October LC, new highs for 2024. The exception is spot August which is unchanged for the week but lower on the month, being supported loosely by its discount to cash.

    There are some unfounded rumors being circulated about why futures are down so hard, but with the cutout expected to continue to decline, (now $12/cwt off its highs), packer margins worsening and talk of a sub-600k head slaughter this week, perhaps those factors are enough to click the sell button.

    Not to mention tomorrow’s monthly USDA Cattle-on-Feed report which will show at least 100k more cattle on feed than a year ago as of July 1. A fact that proves there is no shortage of fed cattle so far in 2024, despite expectations to the contrary. Bulls remain focused on the low number of beef cows that have calved number reported in January 2024 in the USDA’s annual Cattle Inventory report as proof of the impending beef cattle shortage. And for a variety of reasons, known and unknown, there has been no proof yet of a shortage of fed cattle supplies.

    The bullish psychology and feeding economics have kept cattle on feed longer in 2024 with more days on feed reported, bigger out weights, heavier carcasses and record numbers of yield grade 4s and 5s. Bullish expectations have boosted values on this summer’s cattle feeder cattle video sales too.

    The USDA just released the most recent actual slaughter-related data for the week ending July 6 and steer carcass weights rose 5 pounds clocking in at 916 pounds. This is an all-time high carcass weight for this date and 24 pounds above a year ago.

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