The livestock complex was looking for fundamental support from cash trade as it seemed packers were picking and choosing where they were buying cattle, and cash trade did not develop until Thursday. There was light dressed trade in Nebraska at $240, $5 higher than last week, and trade in the South was $2 higher at $150.
Traders reacted favorably to the Cattle on Feed report, with futures opening higher to begin the week and trading mostly sideways throughout the week. The October live cattle contract was higher $1.63 to $151.40, and the December contract was higher $1.75 to $153.42.
“CME cattle futures are in modest correction mode after the recent breakout to new contract highs,” Cassie Fish, market analyst for The Beef, wrote on Wednesday. “The other big news here is that open interest has increased a whopping 20k contracts in the last three trading days, likely indicating an increase in managed fund length and commercial selling. Friday’s Commitment of Traders report will shed some light here.”
Cash trade through Thursday was estimated to be 35,000 head. Live steers traded between $150-152, averaging $151.18, and dressed steers traded at $236.
Total cash trade for the week ending Oct. 23 was 102,849 head. Live steers averaged $150.13, and dressed steers averaged $235.34.
“Feedlots are again pushing on packers and trying to get cattle sold for more money, and given how thin front-end supplies are, it’s likely that this theme of higher cash trade continues well into December,” ShayLe Stewart, DTN livestock analyst, said in Wednesday’s closing comments.
The national weekly direct beef type price distribution for the week of Oct. 17-24 was the following on a live basis:
• Negotiated purchases: $150.01.
• Formula net purchases: $148.87.
• Forward contract net purchases: $150.14.
• Negotiated grid net purchases: $148.60.
On a dressed basis:
• Negotiated purchases: $235.28.
• Formula net purchases: $235.24.
• Forward contract net purchases: $228.50.
• Negotiated grid net purchases: $231.88.
Slaughter through Thursday was estimated to be 512,000 head, 3,000 head above the prior week. Slaughter for the week earlier is estimated at an impressive 673,000 head. Actual slaughter for the week ending Oct. 15 was 662,227 head. Dressed steer weights were 924 lbs.
Boxed beef prices were sharply higher, with the Choice cutout up $8.87 to $262.49 and the Select cutout up $9.83 to $231.91.
“Box prices were active this past week and early this week as the seasonal demand for beef supports higher prices,” the Cattle Report wrote. “Retailers sense the shortened supplies of cattle to come and are competing to add inventory. Frozen beef stocks are high, as well as inventories of fresh suspended beef. Those reserve sources provide a buffer to retailers attempting to diminish sharp price increases from the processors.”
USDA’s National Agricultural Statistics Service released its latest Cold Storage report, showing the total pounds of beef in freezers was up 2% from the previous month to 470 million lbs., up 19% from last year.
Feeder cattle
Feeder cattle traded mostly sideways but closed modestly higher. The October contract was up 40 cents to $175.97, and the November contract was up 57 cents to $178.12. The CME Feeder Cattle Index was up $2.75 to $174.78.
“Buyers in the countryside are still in a tough position as they want to get their orders filled but they’ve got to do so carefully as they have thin margins to work with and the runs of feeder cattle have been lighter than expected,” Stewart wrote on Thursday.
Corn closed slightly lower as the latest Crop Progress report shows 61% of corn was harvested as of Oct. 23, up 16 percentage points from the previous week. The December contract was down 2 cents to $6.82, and the March contract was down 3 cents to $6.87.
Kansas:Winter Livestock in Dodge City sold 3,260 head Wednesday. Compared to the previous auction, steer calves 400-500 lbs. sold $5-6 lower. Steers 500-600 lbs. sold $5-6 higher. There was no recent comparison of heifer calves 400-600 lbs., however, a lower trend was noted. A group of steers averaging 734 lbs. sold between $170-173, averaging $171.12.
Missouri:Joplin Regional Stockyards in Carthage sold 4,590 head on Monday. Compared to a week earlier, feeder steers under 525 lbs. sold $8-13 higher, with heavier weights trading $2-6 higher. Feeder heifers under 625 lbs. sold $9-11 higher, with heavier weights selling steady to $3 higher. Benchmark steers averaging 793 lbs. sold between $176-181, averaging $179.34.
Nebraska:Tri-State Livestock in McCook sold 2,000 head Monday. Compared to the last auction, steers were $1-8 higher and heifers were $1-6 higher. A group of steers averaging 631 lbs. sold between $188-193 and averaged $190.67.
Oklahoma:Oklahoma National Stockyards sold 9,000 head on Monday. Compared to a week earlier, feeder steers sold $2-5 higher, and feeder heifers sold $1-4 higher. Steer calves sold unevenly steady, and heifer calves sold $2-5 higher. Benchmark steers averaging 782 lbs. sold between $175.75-176, averaging $175.82.
South Dakota:Sioux Falls Regional Cattle Auction sold 5,148 head Monday. Compared to the last auction, steers and heifers of similar weights were unavailable, so a comparison could not be made. Benchmark steers averaging 778 lbs. sold between $176-188, averaging $185.24.
Wyoming:Winter Livestock in Riverton sold 4,344 head Tuesday. There was a light offering on yearlings, so a comparison could not be made. Steers under 500 lbs. sold steady, with instances of $4-8 higher, and 500-700 lbs. were steady to $8-10 higher, with instances of $15-16 higher. Heifer calves sold with higher overtones, with instances of $2-6 higher. The best advances were on 550-590 lb. replacement heifers, with instances of $15 higher. Benchmark steers averaging 716 lbs. sold between $161-174.50, averaging $168.22. —Charles Wallace,WLJeditor
