The big question in the markets is how cattle slaughter levels will continue to impact cash prices.
The CME markets were closed on Monday due to the holiday. Through Thursday, live cattle futures posted higher, even with uncertainties regarding processing capacity. The February contract gained just over $1 to close at $138.32, and the April contract gained over $2 to close at $143.17.
Cash trade numbers remain slim due to packer throughput issues. Through Thursday afternoon, about 55,000 head had traded. Live steers sold between $136-138, and dressed steers sold from $217-218.
“The negotiated cash fed cattle market this week has been slow and the price generally steady with last week. If throughput was normal, it’s likely cash prices would be higher,” wrote Cassie Fish, market analyst, in The Beef.
Cash trade through Jan. 16 totaled 61,172 head. Live steers averaged $136.62, and dressed steers averaged $218.03.
The national weekly direct beef type price distribution for the week of Jan. 10 to Jan. 17 was the following on a live basis:
• Negotiated purchases: $136.76.
• Formula net purchases: $141.37.
• Forward contract net purchases: $142.86.
• Negotiated grid net purchases: $139.86.
On a dressed basis:
• Negotiated purchases: $218.07.
• Formula net purchases: $222.60.
• Forward contract net purchases: $213.52.
• Negotiated grid net purchases: $221.12.
Slaughter through Thursday totaled 116,000 head, bringing the week’s total to 461,000 head. This was 6,000 head more than a week earlier but 8,000 head short of the same time a year earlier. Slaughter through Jan. 13 is estimated at 621,000 head. Actual slaughter through the first full week of January totaled only 619,479 head.
“The improvement at beef processing plants is slow and not big enough yet to have a true and lasting positive impact on negotiated cash fed cattle prices and somewhat on CME cattle futures,” Fish wrote on Thursday.
“A 117k head slaughter day on Tuesday followed by 115k head yesterday aren’t quite good enough, as the industry needs to be able to easily process at least 120k head per day to be out of the woods.”
Boxed beef prices continue to shoot higher. The Choice cutout gained over $10 from the previous week to close at $292.98, and the Select cutout gained just under $10 to close at $282.18.
“Once again, we are seeing box prices shoot higher, while fed prices move lower,” the Cattle Report wrote. “Retailers will be forced to raise prices on the beef counter, making beef a focus point for the battle against inflation. There also will be some beef products that are out of stock and result in a lost sale. These conditions force consumer decisions that threaten the destruction of beef demand.”
Feeder cattle
The January contract lost $1.75 to close at $161.17, and the March contract lost nearly the same to close at $164.95. The CME Feeder Cattle Index lost 4 cents to close at $161.20.
Corn futures are back over $6. The March contract gained 24 cents to close at $6.11, and the May contract gained 21 cents to close at $6.10.
“The corn market isn’t even to blame for Thursday’s weakness as corn contracts are trading mostly steady after Wednesday’s wild advancement,” Stewart said. “Largely, the feeder cattle contracts are lower on a pullback from traders and with the live cattle contracts now lower too, the market is apprehensive about being too bullish.”
Colorado: Winter Livestock in La Junta sold 5,165 head on Tuesday. Compared to the last sale, steers under 550 lbs. sold mostly steady, 550-700 lbs. sold $2-3 higher and over 700 lbs. sold steady to $1 lower. Heifers under 600 lbs. sold $2-3 lower, 600-700 lbs. sold steady to $2 lower and over 700 lbs. sold steady to $3 lower, with the decline on 750-800 lbs.
Iowa: Russell Livestock in Russell sold 4,018 head on Monday. Compared to the previous auction, steer calves under 550 lbs. sold steady to $3 higher, 550-750 lbs. were mostly $2-7 higher and over 750 lbs. ended mixed. Heifers under 650 lbs. ended mixed, while 650-750 lbs. sold $2-4 lower. Benchmark steers averaging 780 lbs. sold between $154-166, averaging $160.06.
Kansas: Winter Livestock in Dodge City sold 3,620 head on Wednesday. Compared to the prior week, yearling steers 600-950 lbs. sold steady to $3 higher. Steer calves 400-600 lbs. sold unevenly steady. Yearling heifers 550-900 lbs. sold steady to $3 higher. Heifer calves 400-550 lbs. sold unevenly steady. Benchmark steers averaging 777 lbs. sold between $148-157.50, averaging $155.19.
Missouri: Joplin Regional Stockyards in Carthage sold 5,000 head on Monday. Compared to a week earlier, feeder steers traded steady to $2 lower, and feeder heifers traded $2-8 higher. Benchmark steers averaging 727 lbs. sold between $159-165.50, averaging $160.87.
Nebraska: Tri-State Livestock in McCook sold 3,610 head on Monday. Compared to the last auction, steers were steady to $9 higher, except for 850-950 lbs., which traded $4-9 lower. Heifers were steady to $9 higher. Benchmark steers averaging 774 lbs. sold between $166.75-171.75 and averaged $169.51.
Oklahoma: Oklahoma National Stockyards in Oklahoma City sold 15,500 head Monday. Compared to the previous sale, feeder steers and heifers sold mostly steady to $2 higher. Steer and heifer calves sold steady. A group of fancy steers averaging 761 lbs. sold between $166.50-168.50, averaging $167.43.
South Dakota: Sioux Falls Regional Livestock in Worthing sold 4,989 head Monday. Compared to the previous auction, feeder steers 350-400 lbs. sold $3-7 higher, 400-500 lbs. were $7-11 lower, 500-600 lbs. were $5-10 higher, 600-650 lbs. traded $3-6 lower, 650-700 lbs. were $1-3 higher, 700-750 lbs. sold $1-5 lower, 750-800 lbs. were $3-5 higher, 800-900 lbs. were steady to $2 higher and over 900 lbs. traded $4-9 lower. Feeder heifers were steady to $4 lower, but 500-550 lbs. traded $3-7 higher, and 700-900 lbs. sold $1-3 higher. Benchmark steers averaging 721 lbs. sold between $159-172.75, averaging $165.85. — Anna Miller, WLJ managing editor
