Following a bullish Cattle on Feed report that showed cattle and calves on feed 2% below last year, the market traded on a higher note over the week. Placements were found to be 8% lower, and marketings were 5% below 2022.
Live cattle futures were higher over the week. The August contract gained just over a dollar to close at $179.85, and the October contract gained $2.40 to close at $180.72.
“October LC (live cattle) is the highest since August 15 and has rallied back to its 40-day moving average,” wrote Cassie Fish, market analyst, in The Beef on Thursday. “On a weekly basis the market has posted an inside week with a possible higher close tomorrow. If Oct LC was to take out last week’s high of $181.75, then the charts would really appear strong.”
Cash trade was slow to get started and finally developed Thursday morning, when more than 20,000 head sold. Total cash trade through Thursday morning was about 27,000 head. Live steers sold from $184-186, and dressed steers sold from $290-295.
Cash trade for the week ending Aug. 20 totaled 72,015 head. Live steers averaged $185.17, and dressed steers averaged $294.01.
The national weekly direct beef type price distribution for the week of Aug. 14-21 was the following on a live basis:
• Negotiated purchases: $184.98.
• Formula net purchases: $189.30.
• Forward contract net purchases: $181.57.
• Negotiated grid net purchases: $186.91.
On a dressed basis:
• Negotiated purchases: $294.31.
• Formula net purchases: $294.51.
• Forward contract net purchases: $269.11.
• Negotiated grid net purchases: $297.89.
Slaughter through Thursday totaled 488,000 head, about 10,000 head below a year earlier. Total slaughter for a week earlier is estimated at 616,000. Actual slaughter for the week ending Aug. 12 was 602,975 head. The average dressed steer weight was 901 lbs., 6 lbs. above the prior week.
“The implications to the market of reduced slaughter are some reliefs from buying pressures for packers, but no guarantees of profitability,” the Cattle Report wrote on Thursday. “Currently we are witnessing declining numbers and those conditions are expected to continue for a couple of years. This will assure smaller slaughter volumes in the future and require constant adjustments to find a balance between availability of cattle and price of the beef.”
Boxed beef prices were several dollars higher. The Choice cutout gained over $3 to close at $317.63, and the Select cutout gained $5.65 to close at $291.91.
“While there is much bashing of sluggish fed cattle beef demand, beef 90s have been impressively strong this week, making a new high for the move and the highest since 2015, (not counting COVID) at $305.93,” Fish said. “Keep an eye out as 2024 will likely see the greatest beef grinding material rally since 2014.”
Feeder cattle
“It was a near perfect Monday for the feeder cattle complex as traders jumped at the opportunity to trade last week’s bullish Cattle on Feed report, and with the added encouragement of the corn market’s decline, feeders skipped through Monday’s close without a care in the world,” ShayLe Stewart, DTN livestock analyst, wrote on Monday.
On Thursday, she continued, “With corn prices again trading lower and the live cattle contracts pushing higher prices into Thursday’s noon hour, the feeder cattle complex is seeing ample signs of support which is why the complex is trading higher.”
Feeder cattle futures closed with the August contract up about $2.20 to $246.50 and the September contract up about $3.60 to close at $250.75.
The CME Feeder Cattle Index gained about 50 cents to close at $245.14.
Corn futures traded sideways, with the September contract down a penny to $4.72 and the December contract up 3 cents to $4.88.
Kansas: Winter Livestock in Dodge City sold 832 head on Wednesday. Compared to the prior sale, there were not enough feeder steers and heifers for a market test, but a steady trend was noted. Benchmark steers averaging 758 lbs. sold for $248.50.
Missouri: Joplin Regional Stockyards in Carthage sold 3,539 head on Monday. Compared to a week earlier, feeder steers under 625 lbs. sold $6-8 lower with heavier weights selling steady to $2 lower.
Nebraska: Bassett Livestock Auction in Bassett sold 570 head on Wednesday. Compared to a week earlier, there was no comparable offering. A group of benchmark steers averaging 693 lbs. sold for $286.75.
New Mexico: Roswell Livestock in Roswell sold 581 head Monday. Compared to last week, steer calves 450-500 lbs. sold steady. There were not enough sales for an accurate comparison of feeder steers and heifers. Heifer calves 400-500 lbs. sold $8-14 higher, while 500-600 lbs. sold steady to $1 higher. A group of steers averaging 672 lbs. sold between $205-267, averaging $241.85.
Oklahoma: Oklahoma National Stockyards in Oklahoma City sold 5,200 head on Monday. Compared to a week earlier, feeder steers sold steady to $2 lower and feeder heifers sold $2-4 lower. Steer and heifer calves sold steady to $3 lower. Demand was moderate to good. Benchmark steers averaging 779 lbs. sold from $244-249, averaging $246.45. — Anna Miller, WLJ managing editor
