Cattle markets seemed to start coming off the pandemic lows created by the coronavirus. Packing plants are getting up to speed slowly but deliberately, and daily processing is picking up. Futures markets were starting to feel comfortable especially after some packers established new cash minimum prices. The June live cattle moved the expanded limit up $4.50 to $93.97 and August also gained $4.50 to close at $99.95. Feeder cattle contracts also had big moves with May gaining $6.17 to $130.27 and August feeders up $5.40 to $138.15.
The latest established market in any region occurred last Wednesday, with live purchases in the Southern Plains from $95-110, bulk at $110. In Nebraska on Wednesday live purchases traded at $95.00 with dressed purchases from $145-180, bulk at $150. Dressed purchases on Wednesday in the western Corn Belt traded from $145-180, bulk at $180.00. There were 15,700 cattle priced on the grid and formula at $164, at an average carcass weight of 885 lbs.
The Cattle Report commented, “The same pricing pattern of the past couple weeks was on full display this week. Live prices have traded from $95 to $110 live. In both Nebraska and Iowa dressed prices ranged from $145 to $180. There is no theory of pricing that can ever explain these prices. Most varying prices traded on the same day in the same region. It is certainly not the result of negotiation and/or price discovery. One packer announced they were flooring cattle prices at $115.”
Wholesale beef markets were continuing their uptrend with the Choice cutout gaining $9.36 to $458.54 and Select was up $16.61 to $448.57 on just 95 loads of cuts and trim. Grinding markets were also stronger; 90 percent lean trim was trading at $273.91 and 50 percent lean was at $270.32. The cow beef cutout was $198.98. Demand for fresh ground beef is great. Wendy’s burger chain said they wouldn’t have hamburgers on the menu at 18 percent of their stores.
Slaughter was estimated to be 86,000 head Thursday, which is now starting to grow as more plants become operational. Slaughter through Thursday was 323,000. The same period last week was 301,000 head and last year was 477,000 head. With Mother’s Day and Memorial Day just around the corner, packers will be under pressure to deliver more beef.
Cassie Fish at Consolidated Beef Producers said, “Soon after the blog posted yesterday, one major packer paid $15 higher than the established negotiated cash cattle trade of $95. Another major packer floored the grid cattle to be harvested next week $5 above that new higher price of $110. Both of these actions were a signal to CME cattle futures that cattle prices could start to narrow the gap between themselves and wholesale beef prices. Futures closed limit up yesterday and have traded limit up on expanded limits today.
“Also, new this time was a statement by President Trump yesterday afternoon stating he had asked the Justice Department to investigate the disparity between cattle prices and wholesale beef prices, as some have alleged meat packers have broken antitrust law. Politics are as hard to get a handle on as COVID-19, so it is difficult to guess what this action means when translated into reality. For now, the futures market is viewing it with optimism,” Fish reported.
Oklahoma City National Stockyards offered 11,307 in last Monday’s sale and found a stronger market. They reported feeder steers and heifers $1- $5 higher, and calves lightly tested. Few steer calves sold steady to $5 higher. Few heifer calves were steady to $3 lower. Demand was considered moderate to good.
Regional Stockyards in Joplin, MO, offered 7,294 head last Monday and saw a mixed market. Compared to last week, steers under 550 lbs. and heifers under 600 lbs. were steady to $5 lower, steer calves over 550 lbs. and yearling steers were steady to $3 higher, with yearling heifers steady. Demand was moderate, supply was heavy. Trade improved as the cattle futures turned favorable to buyers. Several strings of new crop calves, along with loads of yearlings, were in the offering.
Huss Valley Auction, Kearney, NE, offered 4,879 head for sale. Compared to two weeks ago, steers over 700 lbs. sold $2-4 higher, except 750-lb. steers which sold $10 higher. Heifers from 550 to 700 lbs. sold $8 higher, and over 700 lbs. sold $2-4 higher. Demand was moderate at the start of the sale with good demand by mid-day after the CME cattle boards shot upward and closed the day substantially higher. Some of the top prices of the day came at the end of the sale as buyers battled to fill trucks with adequate weight. The CME feeder cattle index was at $119.50. — Pete Crow, WLJ publisher
