Kevin Penner: Cattle prices seen steady/higher this week
DES MOINES, Iowa--Cash Cattle were able to trade steady to higher at mostly $97/cwt last week and the call for this week is, again: Steady to higher.
Although seasonal pressure tends to weigh on cattle prices after Labor Day, 2010 is showing substantial strength in the export market and cattle feeders have done an excellent job managing the fed supply. The increase in export business and the size of cattle currently available to be slaughtered may be enough to temper seasonal tendencies this year.
Labor Day is the unofficial end to the summer grilling season. As outdoor temperatures cool and as children return to school the number of meals prepared outside on the grill falls. This seasonal trend in retail sales is a major factor in the seasonal decline of cattle prices in September into October. This year we have notable strength in the export markets to help offset the seasonal decline. Recent USDA reports show July 2010 exports up 23 percent from a July 2009. Also helping to offset the seasonal price decline is the average weight of cattle available for sale to packers. Steer carcass weights were recently reported to be an average of 16lbs below last year.
This balance in 2010 should allow cattle prices to remain strong. Despite seasonal tendencies to pressure cattle prices, this year we are seeing exports and fed cattle size offset that pressure.
The call for cash cattle this week is Steady/Higher. No bids have yet been reported and cattle are being offered at $99-$100.
Kevin H. Penner
Commodity Services, Inc.
Des Moines, Iowa