By Cassie Fish,

It’s July 11, and fed cattle prices are much higher than anticipated a couple of months ago. Since the largest negotiated fed cattle trade occurs in Nebraska each week and the premium in the north is record wide, that means the 5-area average price posted last week at $144.35. That was $1.71 lower the prior week, which was the 2022 high.  The south limped along at $137 to $138. And for the second week in a row, trade volume was light as packers resisted buying big volume, happy to instead draw on captive supply to fill needs.

And needs they indeed have, since fed cattle slaughter continues to stay elevated along with non-fed slaughter clocking in at over 21%. Still last week’s holiday slaughter of 593k head – thanks to an 88k Saturday. Expectations for this week’s harvest are 668k head, which means a fed slaughter of +520k, which is very good for July.

Boxed beef values last week were actually higher than the prior week and are only about $4 off the high for the year. It is hard to find anyone who isn’t predicting seasonal wholesale beef weakness the rest of July, but packer margins are solidly black and last week even improved a bit. Choice boxes printed up a buck this morning.

CME cattle futures are putting in a bullish day. Friday’s CFTC Commitment of Traders’ report once again showed funds getting shorter and commercials getting less short, a bullish signal. Commercials see value in owning futures contracts.

Spot August LC is up 200 points the day, reaching the highest point since June 21, and pushing above the 100-day moving average. It’s an impressive performance but it’s worth noting the market has been fickle as of late. Feeder cattle futures are rallying despite a green day in corn. CME feeder cattle values have been making new highs weekly in an uptrend that began in late May.

There is a USDA Cattle-on-Feed report on Friday and depending on the level of June placements, COF July 1 could drop below a year ago.

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