Traders continue to renew interest in cash cattle, and in response, they climbed higher another week. Feeder cattle have struggled to hit and stick to the $160 mark, pressured by ever-growing corn prices.
Live cattle futures were slightly higher over the week. The December contract gained $1.25 to close at $131.87, and the February contract gained 55 cents to close at $136.40.
Live cattle cash trade for the week was mostly $3 higher, and dressed trade was $4 higher. Wednesday saw the brunt of trading, with close to 34,500 head selling between $130-132 and dressed trade at $205-207. Formula cattle have traded the gauntlet, anywhere from $202-213.
“Traders are realizing they have all the upward potential they could wish for, but traders are skeptical of getting too bullish as they know the dynamics in the cattle market aren’t for the weak-hearted,” remarked ShayLe Stewart, DTN livestock analyst, in her Thursday midday comments.
“Thankfully the market has once again seen higher cash cattle trade this week, and packers have renewed bids in all three of the major feeding states (Kansas, Nebraska and Texas).”
Total cash trade the first week of November reached nearly 100,000 head again, thanks to a substantial amount of trade on Friday afternoon. Trade totaled 96,867 head, with live steers averaging $129.17 and dressed steers averaging $202.87.
The Fed Cattle Exchange Auction listed a total of 1,866 head, of which 741 actually sold. Opening prices ranged from $123-129, and high bids ranged from $123-131.
The national weekly direct beef type price distribution for the week of Nov. 1 to Nov. 8 was the following on a live basis:
• Negotiated purchases: $129.15.
• Formula net purchases: $127.83.
• Forward contract net purchases: $132.15.
• Negotiated grid net purchases: $126.84.
On a dressed basis:
• Negotiated purchases: $202.52.
• Formula net purchases: $202.48.
• Forward contract net purchases: $200.48.
• Negotiated grid net purchases: $200.48.
Slaughter through Thursday totaled 482,000 head, about 5,000 head short of the week prior. Slaughter for the first week of November is estimated at 650,000 head. USDA did not release an actual weekly slaughter report for the last week of October due to the Veterans Day holiday.
Boxed beef prices experienced a setback, closing the Choice/Select spread to $17.85. The Choice cutout lost about $5 to close at $285.14, and the Select cutout lost about $1 to close at $267.29.
“Boxed beef cutout values are record high for any November in history, but the normal, brisk holiday rally is not occurring. Instead, the market is holding at the high level, but not advancing rapidly as it did back in August,” remarked Cassie Fish, market analyst, in The Beef.
“In fact, the cutout may top in November, rather than in December as is seasonally typical. And a substantial correction is likely to occur in December.”
Feeder cattle
“The further you look into 2022, the better the market is,” Stewart said. “One could argue there’s too much ‘optimism’ built into the 2022 market, but with the nation’s cowherd retracting and beef demand holding a strong foot in the market, I tend to believe 2022 will indeed bring greater profitability at the pace the market’s turning right now.”
Feeder cattle futures struggled against increasing corn prices and ultimately closed mixed over the week. The November contract lost 70 cents to close at $157.32, and the January contract gained 90 cents to close at $159.07. The CME Feeder Cattle Index lost about 34 cents over the week to close at $155.47.
Corn futures contracts closed about a dime higher on each contract; the December contract gained 10 cents to close at $5.69, and the March contract gained 11 cents to close at $5.78.
“This past week will wrap up the heaviest movements of the fall season,” the Cattle Report said. “November will see fewer cattle offered, and feedlots will struggle to fill empty pens as marketing numbers leave a gap.
“October placements will likely exceed the prior year, but last year’s October placements were small from COVID-induced chaos. The smaller calf and feeder supplies will be matched against prospects of higher feed costs.”
Missouri: Joplin Regional Stockyards in Carthage sold 7,000 head Monday. Compared to the last sale, feeder steers under 700 lbs. sold steady to $3 lower, and weights over 700 lbs. traded steady to $5 higher. Feeder heifers traded steady to $3 higher. Benchmark steers averaging 738 lbs. sold between $157-162.50, averaging $160.58.
Nebraska: Tri-State Livestock in McCook sold 2,660 head on Monday. Compared to the previous auction, steers were steady to $5 higher, and heifers were mostly steady, with instances of $8 higher on 500 lb. offerings. A group of steers averaging 665 lbs. sold between $147-156, averaging $153.02.
New Mexico: Roswell Livestock in Roswell sold 2,477 head on Tuesday. Compared to the previous auction, steer calves under 600 lbs. were uneven but mostly $3 higher; feeders over 600 lbs. were steady to $3 higher; and calves over 600 lbs. sold unevenly steady. Heifer calves under 600 lbs. sold $1-3 higher; feeders over 600 lbs. were $1 higher; and calves over 600 lbs. sold $4 lower.
Oklahoma: Oklahoma National Stockyards in Oklahoma City sold 10,275 head Monday. Compared to a week earlier, feeder steers and heifers sold $5-7 higher. Steer calves sold $7-10 higher, and heifer calves sold unevenly steady. Benchmark steers averaging 763 lbs. sold between $150-165, averaging $159.85.
South Dakota: Philip Livestock Auction in Philip sold 6,526 head Tuesday. Compared to a week earlier, feeder steers under 450 lbs. sold steady to $4 higher; 450-500 lbs. sold $4-6 lower; 500-600 lbs. sold $6-8 lower; 600-650 lbs. sold $2 lower; and 650-700 lbs. sold steady to $4 lower. Feeder heifers under 400 lbs. sold $6 lower; 400-500 lbs. sold $8-10 lower; 500-550 lbs. sold $4-6 lower; 550-600 lbs. sold steady; and 600-650 lbs. sold $3 lower. Benchmark steers averaging 658 lbs. sold between $154.24-175.50, averaging $168.70. — Anna Miller, WLJ managing editor
