This Week in Grass Cattle

Another soft week on the board last week which is spilling over to the cash market. Roughly $4 has been lost over the last couple of weeks on the SEP 10.

Margins are tightening considerably, largely due to uncertainy in the Eurozone which is driving down the value of the Euro and driving up the value of the dollar making U.S. exports less attractive to foreign buyers.

I expect this trend to continue throughout the summer.

If the International Monetary Fund continues to swap dollars for euros to prop up Euro banks, the the value of the dollar could skyrocket causing the softening of commodity values to intensify.

The cash market I think is fairly stable for now as there are still profits for the taking in the fats if feeders are bought right.

Interestingly, heifers seem to be the real deal right now as they appear to be pretty undervalued in the market place:

Buy steers, medium 1 664# @ $124.34
Lock 'em in on the board for SEP 10 @ $108.90
Run on grass for 105 days @ $0.72/day
Allow $20/hd for operating costs
Sell 863# in September
Breakeven $106.68
Profit $19.13/hd less basis and commissions.

Buy heifers, medium 1 680# @ $111.81
Lock 'em in on the board for SEP 10 @ $108.90
Run on grass for 105 days @ $0.72/day
Allow $20/hd for operating costs
Sell 858# in September
Breakeven $99.69
Profit $78.99/hd less basis and commissions.

Interesting!!

Buy steers, medium 1 773# @ $114.28
Lock 'em in on the board for SEP 10 @ $108.90
Run on grass for 105 days @ $0.72/day
Allow $20/hd for operating costs
Sell 941# in September
Breakeven $104.03
Profit $45.76/hd less basis and commissions.

Buy heifers, medium 1 767# @ $109.05
Lock 'em in on the board for SEP 10 @ $108.90
Run on grass for 105 days @ $0.72/day
Allow $20/hd for operating costs
Sell 914# in September
Breakeven $101.97
Profit $63.33/hd less basis and commissions.

Looking Good Girls!!

Buy steers, medium 1 826# @ $111.49
Lock 'em in on the board for SEP 10 @ $108.90
Run on grass for 105 days @ $0.72/day
Allow $20/hd for operating costs
Sell 962# in September
Breakeven $105.61
Profit $31.65/hd less basis and commissions.

Buy heifers, medium 1 841# @ $105.00
Lock 'em in on the board for SEP 10 @ $108.90
Run on grass for 105 days @ $0.72/day
Allow $20/hd for operating costs
Sell 956# in September
Breakeven $102.31
Profit $62.97/hd less basis and commissions.

Lots of demand for steers which is leaving the heifers pretty reasonable right now.