The cattle complex started the year mostly lower as cash trade was mostly inactive at steady prices. The one bright spot is the Choice cutout is at a record high for the first week of January.
Live cattle futures closed lower, with the February contract down $1.50 to $157.35 and the April contract down $1.18 to $161.27.
Cash trade developed later in the week, with 18,600 head sold through Thursday. Live steers sold between $158-159.50, averaging $158.04. Dressed steers averaged $250.35.
Trade in the South was mostly steady with the prior week’s weighted average, while asking prices remained firm at $158-159. A few dressed deals were reported in parts of eastern Nebraska at $252, roughly 50 cents higher than the prior week’s weighted average.
Cash trade for the week ending Jan. 1 was 72,866 head. Live steers averaged $157.83, and dressed steers averaged $251.95.
The national weekly direct beef type price distribution for the week of Dec. 26 to Jan. 2 was the following on a live basis:
• Negotiated purchases: $157.99.
• Formula net purchases: $158.05.
• Forward contract net purchases: $165.80.
• Negotiated grid net purchases: $159.88.
On a dressed basis:
• Negotiated purchases: $251.97.
• Formula net purchases: $253.13.
• Forward contract net purchases: $236.67.
• Negotiated grid net purchases: $250.63.
Slaughter through Thursday was 385,000 head, 3,000 head below the previous week. Slaughter for the week ending Dec. 31 was estimated to be 547,000 head, 15,000 head below the prior week. Actual slaughter for the week ending Dec. 24 was 551,952 head (steers 44.8%, heifers 30.6%). The average steer dressed weight was 920 lbs.
“Determining what a normal kill schedule will be in 2023 remains a wildcard as packers are going to be closely monitoring their margins,” ShayLe Stewart, DTN livestock analyst, wrote in Tuesday’s midday comments. “Higher boxed beef prices allow them more margin and security, but the advancements made in the cash sector will pressure them well through 2023 and likely into 2024.”
Boxed beef prices were higher, with the Choice cutout up $2.21 to $281.63 and the Select cutout up $9.67 to $256.95.
“To start 2023, USDA Choice boxed beef prices are $14/cwt higher than a year ago, meaning they are a record high for the first week of any January in history,” Cassie Fish, market analyst for The Beef, wrote on Wednesday. “Not bad. Fed cattle prices are about $12 cheaper than the all-time high for early January set in 2015.”
Feeder cattle
Feeder cattle futures traded mostly sideways, with the January contract unchanged at $183.80 and the March contract down 22 cents to $186.55. The CME Feeder Cattle Index was up 47 cents to $180.31.
“It’s been a little over two weeks since the market has last seen sale barns run their normal schedules, which will likely mean that buyers are anxious to hit the auction yards and see what prices pan out to be early this year,” Stewart wrote on Tuesday.
Corn contracts traded lower as U.S. corn demand is in question, with Brazil and Ukraine offering their corn at a significant discount. The March and May contracts were 27 cents a bushel lower, with both closing at $6.52.
Colorado: Winter Livestock in La Junta sold 1,311 head Tuesday. Compared to the last auction two weeks earlier, steer and heifer calves in a light test sold mostly steady. Yearling feeder steers over 700 lbs. sold steady to $3 higher. Benchmark steers averaging 732 lbs. sold between $177-185, averaging $183.18.
Kansas: Winter Livestock in Dodge City sold 5,052 head Wednesday. Compared to the previous auction two weeks earlier, feeder steers and heifers 400-950 lbs. sold $6-10 higher. Benchmark steers averaging 765 lbs. sold between $178-185.75 and averaged $182.68.
Missouri: Joplin Regional Stockyards in Carthage sold 10,017 head Monday. Compared to the last auction two weeks earlier, feeder steers traded $4-7 higher, with feeder heifers trading $6-11 higher. Benchmark steers averaging 783 lbs. sold between $178-191.50, averaging $182.95.
Nebraska: Huss Livestock in Kearney sold 1,216 head Wednesday. Compared to the previous auction, 700-850 lbs. steers and heifers sold steady to $4 higher. Benchmark steers averaging 768 lbs. sold between $185-190, averaging $188.46.
Oklahoma: OKC West in El Reno sold 4,500 head Tuesday. Compared to two weeks earlier, steer and heifer calves sold $12-15 higher. Benchmark steers averaging 713 lbs. sold between $182-186 and averaged $184.59.
South Dakota: Sioux Falls Regional Cattle in Worthing sold 3,584 head Monday. Compared to the last auction two weeks earlier, feeder steers sold steady to $3 higher, with instances of $12 higher, except 450-500 lbs., 700-750 lbs. and 800-850 lbs. sold steady to $1 lower. Feeder heifers sold steady to $3 higher, except 550-700 lbs. were steady to $4 lower. Benchmark steers averaging 712 lbs. sold between $182-190, averaging $185.87. — Charles Wallace, WLJ editor
