While futures have been finding momentum on the board, cash cattle continue to trade sideways and slaughter numbers continue to decline.
Live futures closed higher over the week. The October contract gained $1.53 to close at $186.50, and the December contract gained 92 cents to close at $190.42.
“Spot October LC has charged to new all-time highs today,” wrote Cassie Fish, market analyst in The Beef, on Thursday. “The rest of the contracts thus far are not trading above Monday’s high or last week’s highs, which is when contract highs were established.”
Cash trade through Thursday totaled about 56,000 head. Cash trade was slow to get started until Wednesday afternoon, when the bulk of trading occurred. Live steers sold from $183-185, and dressed steers sold from $288-292.
Cash trade for the week ending Sept. 24 totaled 87,245 head. Live steers averaged $184.92, and dressed steers averaged $292.08.
The national weekly direct beef type price distribution for the week of Sept. 18-25 was the following on a live basis:
• Negotiated purchases: $184.85.
• Formula net purchases: $186.45.
• Forward contract net purchases: $179.62.
• Negotiated grid net purchases: $184.88.
On a dressed basis:
• Negotiated purchases: $292.19.
• Formula net purchases: $292.99.
• Forward contract net purchases: $272.19.
• Negotiated grid net purchases: $295.77.
“This week’s harvest is expected to be smaller than last week’s 625k as a few plants are dark tomorrow and Saturday’s slaughter is very small,” Fish said. “Packers are still struggling with margins.”
Slaughter through Thursday was about 505,000 head, compared to 498,000 head a week earlier. Total slaughter for a week earlier is estimated at 625,000 head. Actual slaughter for the week ending Sept. 16 was 631,200 head. The average steer dressed weight was 919 lbs., 2 lbs. higher than the prior week.
“There is finally some good news in the wholesale beef market,” Fish said on Thursday. “The rib, a key player in every Q4 rally, caught fire yesterday and beef 50s, which have been under significant pressure for all of September, are showing signs of a bottom.”
Boxed beef prices traded mostly sideways over the week. The Choice cutout lost 42 cents to close at $301.51, and the Select cutout lost $1.56 to close at $277.44.
“The last quarter of this year will seasonally raise expectations for the middle meats to support the boxed beef market as we move closer to holidays,” the Cattle Report said on Wednesday. “This year might be an occasion for consumers to choose a high-priced beef option after tiring of chicken.”
Feeder cattle
“After feeling the market’s pressure throughout the earlier part of the week, the feeder cattle contracts are now back to trading higher as traders believe the downside endured has been enough at this point,” ShayLe Stewart, DTN market analyst, wrote in her Thursday midday comments.
“Thankfully the market still sits with tremendous fundamental support which is helping alleviate some of the technical, economic and political pressures that continue to loom over the marketplace,” she continued.
Feeder cattle futures ultimately traded lower over the week. The September contract lost 95 cents to close at $251.32, and the October contract lost $3.05 to close at $254.72.
The CME Feeder Cattle lost about $2 to close at $252.20.
Corn futures found their momentum over the week. The December contract gained 13 cents to close at $4.88, and the March contract also gained 13 cents to close at $5.03.
“Feeder cattle and calf prices have been softer this past week in the countryside with many sale barns noting farmers are still out in the field and not showing up as buyers yet,” Stewart wrote on Wednesday.
The Cattle Report wrote: “Winter grazing prospects are also improving with many farms busy planting wheat for winter grazing. Stocker operators will be challenged with nosebleed levels of prices on light calves for grazing.”
Missouri: Joplin Regional Stockyards in Carthage sold 6,500 head on Monday. Compared to the previous sale, feeder steers under 750 lbs. sold $4-8 lower, with heavier weights steady. Feeder heifers under 750 lbs. sold $3-8 lower with heavier weights steady. Benchmark steers averaging 763 lbs. sold from $252-264.50, averaging $261.13.
Nebraska: Bassett Livestock Auction in Bassett sold 2,800 head on Wednesday. Compared to a week earlier, 900-lb. steers traded $7 lower and 950-1,000 lb. steers traded steady to $2 higher. There was a limited number of comparable heifer offerings, but 850 lbs. traded $8 lower. Benchmark steers averaging 757 lbs. sold from $261.50-270, averaging $268.76.
Oklahoma: Oklahoma National Stockyards in Oklahoma City sold 8,500 head on Monday. Compared to a week earlier, feeder steers sold steady to $2 lower and feeder heifers sold $2-4 lower. Demand was moderate to good for feeder cattle. Steer calves sold $4-8 lower, and heifer calves sold $10-15 lower. Unweaned calves sold up to $20 lower. Demand was moderate for calves. Benchmark steers averaging 720 lbs. sold from $254-268, averaging $262.52.
South Dakota: Sioux Falls Cattle Auction in Worthing sold 1,110 head on Monday. Compared to a week earlier, steer and heifer calves sold firm, yearling feeder steers were too lightly tested for comparison and heifers sold steady to $3 higher. Benchmark steers averaging 735 lbs. sold for $275. — Anna Miller, WLJ managing editor
