The cattle complex could not muster any support from traders as they waited cautiously for cash trade to develop and the release of USDA’s World Agricultural Supply and Demand Estimates (WASDE) report.
Thursday’s release of the WASDE report was favorable towards livestock, as production increased by 170 million lbs. in the first quarter. Quarterly price projections for 2023 for the first, second and third quarters are all expected to average $157, and the fourth quarter of 2023 is expected to average $162.
Live cattle futures were mixed, with the February contract up 20 cents to $157.55 and the April contract down 35 cents to $160.92.
“The live cattle complex seems to be merely on hold until traders and cattlemen alike can see what this week’s cash cattle market is going to do,” ShayLe Stewart, DTN livestock analyst, wrote in Wednesday’s midday comments. “The consensus throughout the marketplace is that cash cattle will indeed trade higher—but the real question remains: How many cattle will trade? And by how much higher will they trade?”
Cash trade was slow to develop, with 25,100 head sold. Live steers sold between $155-158 and averaged $157.24. Dressed steers averaged $251.40. Asking prices were around $158-159 in the South and $253-plus in the North. Trade volume may develop Thursday afternoon and/or Friday.
Cash trade for the week ending Jan. 8 totaled 73,664 head. Live steers averaged $157.75, and dressed steers averaged $252.17.
The national weekly direct beef type price distribution for the week of Jan. 2-9 was the following on a live basis:
• Negotiated purchases: $157.96.
• Formula net purchases: $159.83.
• Forward contract net purchases: $164.83.
• Negotiated grid net purchases: $160.17.
On a dressed basis:
• Negotiated purchases: $252.42.
• Formula net purchases: $254.46.
• Forward contract net purchases: $245.40.
• Negotiated grid net purchases: $252.29.
Slaughter through Thursday was expected to be 505,000 head. This past week’s slaughter of 563,000 head was 16,000 head over the previous week, but 56,000 head under last year. Actual slaughter for the week ending Jan. 12 was 534,585 head (steers 46.3%, heifers 30.9%). The average dressed steer weights were 915 lbs.
Boxed beef prices were mixed, with the Choice cutout down $4.14 to $277.49 and the Select cutout up 6 cents to $257.01.
Feeder cattle
Feeder cattle futures dropped lower, with the January contract down $1.68 to $182.12 and the March contract down $2.28 to $184.27. The CME Feeder Cattle Index was higher $2.05 to $182.36.
“It’s likely that the feeder cattle complex turns higher later this week if buyer demand holds strong in sale barns and if cash cattle do indeed trade—both of which would help the market’s morale and assure traders that fundamental strength is still intact,” Stewart wrote in Wednesday’s closing comments.
Traders reacted favorably to the WASDE report. Production was revised downward by 200 million bushels to 13.7 billion bushels, and planted acres were reduced by 1.6 million acres. Yields were revised up by one bushel to 173.3 bushels per acre. As a result, corn contracts climbed higher, with the March contract up 19 cents to $6.71 and the May contract up 17 cents to $6.69.
Colorado: Winter Livestock in La Junta sold 7,273 head Tuesday. Compared to the previous auction, steer calves sold $10-15 higher, and heifer calves were $5-8 higher. Feeder steers over 700 lbs. sold steady to $2 higher, and feeder heifers over 700 lbs. were mostly steady. Benchmark steers averaging 712 lbs. sold between $178.50-184.50 and averaged $182.79.
Kansas: Winter Livestock in Dodge City sold 4,745 head Wednesday. Compared to the last auction, feeder steers and heifers 700-925 lbs. sold steady. Steers 400-700 lbs. sold steady to $3 higher. Heifers 400-700 lbs. sold steady to $2 higher. Benchmark steers averaging 727 lbs. sold between $178.50-188.25, averaging $184.39.
Missouri: Joplin Regional Stockyards in Carthage sold 12,000 head on Monday. Compared to a week earlier, feeder steers traded $2-5 higher, and feeder heifers traded steady. Benchmark steers averaging 790 lbs. sold between $176.75-188.75, averaging $184.32.
Nebraska: Bassett Livestock in Bassett sold 5,930 head Wednesday. Compared to the last auction, 500 lbs. steers traded steady, and 600-700 lbs. traded $4-6 lower. Heifer offerings 550-600 lbs. traded $4-11 lower, and 650 lbs. traded $9 higher. Benchmark steers averaging 721 lbs. sold between $193-200, averaging $197.07.
Oklahoma: Oklahoma National Stockyards in Oklahoma City sold 17,500 head on Monday. Compared to the last sale on Dec. 19, feeder steers sold steady to $4 higher, with most advances on heavier weights. Feeder heifers sold $1-3 higher. Steer calves sold mostly steady, but thin-fleshed calves continue to sell at a big premium. Heifer calves sold $3-6 higher. Benchmark steers averaging 776 lbs. sold between $174-183, averaging $178.30.
South Dakota: Sioux Falls Regional Cattle Auction in Worthing sold 6,767 head Monday. Compared to the last auction, feeder steers 450-600 lbs. and 700-800 lbs. sold steady to $4 higher. Steers 600-700 lbs. and 800-900 lbs. sold steady to $2 lower. Feeder heifers 350-450 lbs., 500-600 lbs. and 750-800 lbs. sold steady to $5 lower. Heifers 450-500 lbs., 600-750 lbs. and 800-850 lbs. sold $1-3 higher.
Texas: Lonestar Stockyards in Wildorado sold 2,152 head Tuesday. Compared to the previous auction, steer calves traded mostly $5-10 higher. Heifer calves traded mostly weak to $2 lower. Due to a light test at the previous auction, there were not enough comparable sales for feeder steers and heifers. Benchmark steers averaging 786 lbs. sold between $175-179.75, averaging $179.63. — Charles Wallace, WLJ editor
