With spring in full swing and grilling season warming up, exceptional beef demand has been fueling the markets higher.
Live cattle traded several dollars higher than the week prior: As of Thursday, the April contract was sitting at $124.15 and the June contract at $125.02.
“Thankfully, the board is continuing to support the upward progression and, oddly enough, June is still trading higher than the spot April contract,” remarked ShayLe Stewart, DTN livestock analyst, in her midday Thursday comments. “Looking to the months ahead, the market could continue to be met with stronger prices as market-ready supplies are expected to grow slim.”
A substantial amount of cash trade took place over the week. Live steers traded from $121-125 and dressed steers from $194-196. The week prior, a total of 77,169 head traded on the cash market. Live steers averaged $118.08 and dressed steers averaged $189.36.
The Fed Cattle Exchange held its weekly sale, and many sold over their reserve pricing. A total of 4,926 head were listed, of which 3,489 actually sold; 1,437 head were listed as unsold, as they did not meet the reserve prices that ranged from $119.50-122. Opening prices ranged from $117.75-122 and high bids ranged from $119-122.75.
Cassie Fish, market analyst in The Beef, reported that the number of fed cattle available in Quarter 2 is actually not much higher than what was slaughtered in Quarter 1. In fact, she said this year’s seasonal increase is all by historical standards. Meaning, the cash market can stay stronger longer into Quarter 2. The second quarter is typically the best beef demand quarter of the year, and May and June usually have the largest fed cattle slaughter.
Boxed beef prices continue to climb higher with spring demand. The Choice cutout was up nearly $20 from the week prior at $270.50 and the Select cutout up over $15 to $263.83.
Slaughter through Thursday totaled 464,000 head, compared to the number of 471,000 head a week earlier. Total slaughter for the week prior is estimated at 609,000 head, smaller than usual due to the holiday weekend. Actual slaughter for the week ending March 20 totaled 628,684 head.
“The surprising low slaughter of last week at 609,000 created a rationing type of environment in the beef business,” remarked the folks at the Cattle Report. “Similar to the extremes of last year caused by COVID, the nation’s beef plants are unable to serve two masters—the consumer and the cattle suppliers. Whether by design or because of aging plants, slaughter capacity is falling seriously short of the industry need.”
Feeder cattle
Although feeder cattle have trended higher in the wake of higher cash cattle, a rally in corn prices on Thursday sent the contracts slightly lower.
“The conversation of stoutly higher cost of gains isn’t going to be something that’s soon forgotten about, as feedlots are easily absorbing expenses of $1.20 to $1.25 in cost of gains daily,” Elaine Kub, DTN analyst, remarked. “Feedlots are getting creative in using other feed to help lessen their need for corn, but throughout the market, feed costs are problematic to their margins.”
April feeders were down slightly Thursday to $147.12 and May feeders were down to $151.60, but still a couple dollars higher than a week prior. CME’s latest Feeder Cattle Index was reported Wednesday at $139.98, down a hair from the week prior. May corn was sitting much higher Thursday at $5.79, about 30 cents greater than the beginning of the week.
Colorado: Winter Livestock in La Junta sold 5,491 head Tuesday. Compared to the prior sale, feeder steers under 700 lbs. sold $5-8 higher, with instances of $10-15 higher; over 700 lbs. sold $3-5 higher. Feeder heifers under 500 lbs. sold $3-5 higher; 500-700 lbs. sold $2-4 higher; over 700 lbs. sold steady to $2 higher. Benchmark steers averaging 767 lbs. sold between $136-143.75.
Missouri: Joplin Regional Stockyards in Carthage sold 5,500 head Monday. Feeder steers and heifers sold steady to $2 lower. Benchmark steers averaging 781 lbs. sold between $135-145.
New Mexico: Roswell Livestock Auction in Roswell sold 1,047 head Tuesday. Compared to the previous sale, steers under 450 lbs. sold $10 higher; steers over 450 lbs. sold mostly steady. Heifers under 500 lbs. sold $2-6 higher; heifers over 500 lbs. sold steady. Benchmark steers averaging 729 lbs. sold between $117-122.
Oklahoma: Oklahoma National Stockyards in Oklahoma City sold 6,800 head Monday. Compared to the prior sale, feeder steers sold $2-3 higher and feeder heifers sold steady to $2 higher. Steer and heifer calves sold moderate to good. Benchmark steers averaging 784 lbs. sold between $138-$145.
South Dakota: Sioux Falls Regional Cattle Auction in Worthing sold 2,426 head Monday. Compared to a week prior, feeder steers sold $2-4 higher with instances of $6-9 higher on 750-800 lbs. Feeder heifers sold $2-4 higher with instances of $1 lower on six-weights and $7-8 higher on 700-750 lbs. Benchmark steers averaging 776 lbs. sold between $143.50-153. — Anna Miller, WLJ managing editor
