Cash trade continued to trade at a standstill until later in the week. Futures traded steady to higher over the week, and boxed beef prices continued their momentum higher.
Live futures were higher over the week, with the February contract up close to $2 to $162.77 and the April contract up 45 cents to $164.07.
Cash trade through Thursday early afternoon was only about 22,000 head. Live steers sold from $159-162, and dressed steers sold from $254-256.
“There is a chance (packers will) have to cough up even more when cash cattle trade gets rolling Thursday or Friday, with asking prices in the South at $163, which would be another $2 week-over-week gain on top of last week’s gain,” wrote Elaine Kub, DTN contributing analyst, in her Thursday midday comments.
Cash trade for the week ending Feb. 12 totaled 108,421 head. Live steers averaged $159.57, and dressed steers sold for $253.88.
The national weekly direct beef type price distribution for the week of Feb. 6-13 was the following on a live basis:
• Negotiated purchases: $159.60.
• Formula net purchases: $159.37.
• Forward contract net purchases: $165.75.
• Negotiated grid net purchases: $159.96.
On a dressed basis:
• Negotiated purchases: $253.71.
• Formula net purchases: $254.97.
• Forward contract net purchases: $247.58.
• Negotiated grid net purchases: $254.19.
Slaughter through Thursday was estimated at 499,000 head, several thousand head more than a week earlier. Projected slaughter for a week earlier is 630,000 head. Actual slaughter for the week ending Feb. 4 was 637,079 head.
“Packers are attempting to stabilize the box market while dealing with the reality of sharply smaller numbers of fed cattle,” the Cattle Report wrote. “Declining supplies of cattle, lower marketing weights and a transition into warmer weather may improve demand for beef and set the stage for a springtime rally.”
Boxed beef prices have been rapidly gaining, with the Choice cutout up over $10 to close at $179.55 and the Select cutout up over $8 to $262.64.
“Boxed beef prices have kept improving through the month of February and are now more valuable than they’ve been since last April,” Kub said on Wednesday.
“Luckily for the packer, the rally in boxed beef values this week may be enough to offset last week’s higher cattle costs and keep them black,” said Cassie Fish, market analyst, in The Beef. “Both the packer and the feeder owe strong beef demand for that.”
USDA’s weekly Export Sales report for the Feb. 3-9 period showed net sales of 28,100 metric tons (mt) were up 72% from the previous week and 34% from the prior 4-week average.
Feeder cattle
Feeder cattle futures traded sideways, with the March contract down 60 cents to $186.22 and the April contract down 12 cents to $190.60.
The CME Feeder Cattle Index was up 53 cents to $183.06.
Corn futures were higher, with the March contract up 6 cents to $6.76 and the May contract also up 6 cents to $6.75.
“One might expect the heifer discounts on steers to narrow and even some speculate heifers might sell on a par with steers,” the Cattle Report said. “The prices of replacement cattle will always be closely tied to grain prices. While calf prices have shot higher, feeder cattle have been kept at bay by grain prices that recently have been moving higher.”
Colorado: Winter Livestock in La Junta sold 3,144 head on Tuesday. Compared with the previous sale, steers under 700 lbs. sold mostly steady, except 400-500 lbs. and 600-650 lbs. sold $3-5 lower. Feeder steers over 700 lbs. sold steady to $3 lower. Heifers under 700 lbs. sold mostly steady, except 550-600 lbs. sold $3-5 lower. Feeder steers over 700 lbs. sold mostly steady. Benchmark steers averaging 773 lbs. sold from $175-178.75, averaging $176.07.
Kansas: Winter Livestock in Dodge City sold 1,845 head on Wednesday. Compared to a week earlier, steers 475-950 lbs. sold steady, and heifers 400-950 lbs. sold steady to $2 higher. Demand was good. Benchmark steers averaging 778 lbs. sold from $178.50-186.60, averaging $183.84.
Missouri: Joplin Regional Stockyards in Carthage sold 8,000 head on Monday. Compared to a week earlier, feeder steers and heifers traded steady to $4 higher. Benchmark steers averaging 755 lbs. sold between $187.50-192, averaging $187.91.
Nebraska: Tri-State Livestock Auction in McCook sold 3,088 head Monday. Compared to the last auction, steers sold $2-12 higher, and heifers were steady to $7 higher. Benchmark steers averaging 733 lbs. sold between $193.50-196 and averaged $194.89.
New Mexico: Roswell Livestock in Roswell sold 1,516 head Monday. Compared to the previous auction, steer calves 350-400 lbs. sold steady, 400-550 lbs. were $10-20 higher, and 550-600 lbs. were $5-6 lower. Heifer calves 400-600 lbs. sold $8-16 higher. Feeder steers 650-700 lbs. were steady to $2 lower, and over 650 lbs. were not well tested. A group of steers averaging 622 lbs. sold between $172-188, averaging $181.37.
Oklahoma: Oklahoma National Stockyards in Oklahoma City sold 9,850 head on Monday. Compared to a week earlier, feeder steers sold steady to $3 lower. Feeder steers sold mostly steady to $3 lower. Feeder heifers sold mostly steady. Steer calves sold steady to $5 lower, and heifer calves sold steady to $3 higher. Benchmark steers averaging 784 lbs. sold between $175-180, averaging $177.88.
South Dakota: Sioux Falls Regional Cattle Auction in Worthing sold 5,651 head Monday. Compared to the last auction, feeder steers under 750 lbs. sold steady to $5 lower, 750-950 lbs. were steady to $2 higher, and over 950 lbs. traded $1-4 lower. Feeder heifers under 700 lbs. sold steady to $4 higher, with instances of $14 higher, and over 700 lbs. traded steady to $4 lower. Benchmark steers averaging 773 lbs. sold between $180-193.75 and averaged $186.35. — Anna Miller, WLJ managing editor
