The market had a late start to the week, as the marketplace was closed on Monday due to the Martin Luther King Jr. Day holiday. Frigid temperatures and snow across the country continue to impact cattle trading. Trade over the week was slow, with most traders holding out until after Friday’s Cattle on Feed report to make any moves.
Live cattle futures were several dollars higher over the week. The February contract gained just over $3 to close at $174.82, and the April contract also gained just over $3 to close at $177.65.
“Traders are also starting to adjust positions ahead of Friday’s Cattle on Feed Report,” DTN said in its Thursday midday comments. “This may add some additional volatility to the market both in front of and after the report.”
Cattle on feed is projected to be 2% higher than a year ago. DTN noted that if reports come in higher than these expectations, traders are likely to be less optimistic about short- and long-term supply consolidation.
Cash trade through Thursday was limited, with less than 2,000 head sold. There were not enough trades for a market trend.
“Asking prices seen over the last couple of days of $174 to $175 in the South still are holding, but given the bullishness of futures trade feeders are likely to start increasing these asking prices, as they focus on steady to higher cash trade by the end of the week,” DTN said, adding that trade may not develop until after the report’s release.
Cash trade for the week ending Jan. 14 was limited at 48,562 head. Live steers averaged $173.58, and dressed steers averaged $273.86.
The national weekly direct beef type price distribution for the week of Jan. 8-15 was the following on a live basis:
• Negotiated purchases: $173.42.
• Formula net purchases: $175.79.
• Forward contract net purchases: $188.36.
• Negotiated grid net purchases: $177.60.
On a dressed basis:
• Negotiated purchases: $273.86.
• Formula net purchases: $278.18.
• Forward contract net purchases: $292.76.
• Negotiated grid net purchases: $276.64.
Slaughter through Thursday is estimated at 462,000 head, compared to 424,000 head a week earlier. Projected total slaughter for the week prior is estimated at 549,000 head, compared to 556,000 head a week earlier. Actual slaughter for the week ending Jan. 6 was 542,462 head. The average dressed steer weight was 937 lbs., 4 lbs. below the prior week.
“Packer margins have likely returned to at least a scratch and there is talk of quite a few Saturdays having been added, which is a positive fundamental factor to support the futures rally,” Cassie Fish, market analyst, wrote in The Beef on Thursday.
She added that steer carcass weights are back to the lowest level since before Thanksgiving, and she expects weights to come down quickly, thanks to the wintry weather conditions.
Boxed beef prices found gains over the week, with the Choice cutout up over $20 to $296.29 and the Select cutout up more than $14 to $283.76.
“Frigid temperatures change buying habits for consumers and stores were finding good demand for roasts as people across the country hunker down and choose to stay in place with hot food close at hand,” the Cattle Report wrote on Thursday.
Feeder cattle
“The optimism seen over the past few days, combined with fundamental and technical support redeveloping in nearby contracts is helping to solidify buyer support,” DTN said.
Feeder cattle futures saw several-dollar gains, with the January contract up $4.65 to $230.92 and the March contract up $5.15 to $232.55.
The CME Feeder Cattle Index lost 46 cents to close at $227.29.
Corn futures continue to decline, with the March contract down 13 cents to $4.44 and the May contract down 14 cents to $4.55.
Colorado: Winter Livestock in La Junta sold 4,075 head on Tuesday. Compared to the last auction, feeder steers sold mostly $1-12 higher across all weight classes. Feeder heifers sold mostly $1-8 higher across all weight classes, with instances of $12 higher. Benchmark steers averaging 774 lbs. sold between $221-239, averaging $234.28.
Kansas: Winter Livestock in Dodge City sold 849 head on Wednesday. Compared to the last auction, there was a light test but a higher undertone was noted on feeder cattle. A group of steers averaging 731 lbs. sold for $245.
Nebraska: Tri-State Livestock in McCook sold 400 head on Monday. There were not enough sales for an accurate comparison as some of the cattle listed did not make it to the yard due to weather conditions. Benchmark steers averaging 762 lbs. sold between $228-235, averaging $231.62.
New Mexico: Roswell Livestock in Roswell sold 1,215 head on Monday. Compared to the previous auction, steer calves 350-450 lbs. sold $24-32 higher, 450-500 lbs. sold $3 higher, 500-550 lbs. traded $14 lower and 550-600 lbs. sold $8 higher. Feeder steers 600-650 lbs. sold $16 lower, and 650-700 lbs. sold steady. Heifer calves 400-450 lbs. sold $10 lower. A group of steers averaging 673 lbs. sold between $220-226.50, averaging $225.07.
South Dakota: Hub City Livestock in Aberdeen sold 1,846 head on Wednesday. Compared to the last auction, steers 550-599 lbs. and 650-699 lbs. sold mostly steady. Heifers 500-599 lbs. sold mostly steady, and 600-649 lbs. traded $8-10 lower. Benchmark steers averaging 729 lbs. sold between $232-247.75, averaging $241.74.
Texas: Lonestar Stockyards in Wildorado sold 751 head on Tuesday. Compared to the last auction, feeder steers and heifers traded mostly $1-2 higher. Steer and heifer calves traded mostly $1-5 higher. A group of steers averaging 789 lbs. sold for $222.50. — Anna Miller, WLJ managing editor
