Boxed beef prices soared ahead of Memorial Day demand propelling cattle futures triple digits higher. According to Cassie Fish, market analyst, for The Beef, cattle futures have reached a new high for May while still trading below the April peak. Increased open interest over the past two days lends credibility to this rally, signaling a return to the market’s upper trading range of the last seven weeks.
Live cattle futures closed higher on the week, with the June contract up $3.07 to $179.02 and the August contract up $3.65 to $177.37.
“The spot August contract is currently trading above its 100-day moving average which is an incredibly bullish signal that traders are indeed interested in supporting the market,” ShayLe Stewart, DTN livestock analyst, wrote in Thursday’s midday comments.
Cash trade through Thursday afternoon was lackluster, with only 3,100 head sold. Live steers sold for $187, and there were not enough dressed steer sales for a trend.
Cash trade for the week ending May 12 was 83,747 head. Live steers averaged $186.02, and dressed steers averaged $295.57. According to Stewart, 67% of sales were committed to nearby delivery, and the remainder (33%) were deferred deliveries.
Slaughter through Thursday was estimated at 487,000 head, 2,000 head lower than the prior week and 14,000 head lower than last year this week. Slaughter for the prior week was projected to be 622,000 head, the same as the prior week and 22,000 head lower than last year. Actual slaughter for the week ending May 4 was 621,527 head. The average steer dressed weight was 923 lbs., 3 lbs. above the prior week. Beef production under federal inspection for the week ending May 11 was 526.6 million pounds.
Boxed beef prices were higher, with the Choice cutout gaining $14.76 to $310.15 and the Select cutout up $10.75 to $296.51.
“Packers are experiencing the biggest margin squeeze of the cycle right now,” Fish wrote Thursday. “One of the reasons it’s been tough is that wholesale beef prices have struggled and the only way to get them to respond was to reduce product availability. The monthly retail beef price data was released yesterday and April prices were the highest for any other month in history, taking out the prior high made in October 2023 by pennies. Year-to-date the average retail beef value is $7.87 per pound.”
Feeder cattle
Feeder cattle futures also closed higher due to higher demand. The May contract was up $6.20 to $244.85, and the August contract was up $6.30 to $257.35. The CME Feeder Cattle Index was up $1.95 to $242.33.
Corn futures were mixed, with the July contract up a penny to $4.57 and the September contract down a penny to $4.67.
Kansas: Winter Livestock in Dodge City sold 1,428 head on Wednesday. Yearling steers sold steady to $3 lower, while yearling heifers sold steady to $5 higher. Benchmark steers averaging 744 lbs. sold between $250-264, averaging $262.95.
Missouri: Joplin Regional Stockyards in Carthage sold 6,686 head on Monday. Compared to the previous auction, feeder steers sold from $5 lower to $12 higher. Feeder heifers sold steady to $8 higher. Benchmark steers averaging 729 lbs. sold between $254-275, averaging $257.99.
Oklahoma: Oklahoma National Stockyards in Oklahoma City sold 8,350 head on Monday. Compared to the last auction feeder cattle and calves sold mostly steady. Benchmark steers averaging 771 lbs. sold between $261-269.50, averaging $266.37.
South Dakota: Hub City Livestock in Aberdeen sold 3,898 head on Wednesday. Compared to the last auction, steers 900-949 lbs. sold $2-3 higher and 950-999 lbs. were mostly steady. Heifers were not well compared this week. Benchmark steers averaging 718 lbs. sold between $272-292, averaging $285.01.
Texas: Lonestar Stockyards in Wildorado sold 1,410 head on Tuesday. Compared to the last auction, feeder steers and heifers traded mostly steady to $1 higher. Steer and heifer calves were too lightly tested last week for a market trend. Benchmark steers averaging 765 lbs. sold between $235-238.50, averaging $238.01. — Charles Wallace, WLJ contributing editor
