Cattle futures closed lower as uncertainty ahead of USDA’s Cattle on Feed report weighed on the market, with analysts expecting placements to rise above year-ago levels due to drought-driven movement of feeder cattle into feedlots and slower marketings. Adding to the pressure, ongoing union-related disruptions at the Cargill plant in Fort Morgan, CO, led to the plant’s lockout of workers.
Live cattle futures were lower, with the June contract down $2.92 to $249.15 and the August contract $6.80 lower to $239.35.
“Wednesday afternoon, the live cattle complex pulled back slightly, mildly uncomfortable by the market’s resistance,” ShayLe Stewart, DTN livestock analyst, wrote in her Thursday midday comments. “However, at Thursday’s open, the market pulled back abruptly, as if someone had accidentally put their hand on a red-hot burner, pulling back with sheer instinct and without hesitation.”
Cash trade through Thursday totaled about 30,000 head. Live steers sold from $258-261, and dressed steers sold from $408-412.
Cash trade for the week ending May 17 totaled 89,722 head. Live steers averaged $262.86, and dressed steers averaged $410.86.
The national weekly direct beef type price distribution for the week of May 11-18 was the following on a live basis:
• Negotiated purchases: $262.79.
• Formula net purchases: $259.66.
• Forward contract net purchases: $242.57.
• Negotiated grid net purchases: $261.51.
On a dressed basis:
• Negotiated purchases: $411.34.
• Formula net purchases: $406.21.
• Forward contract net purchases: $381.61.
• Negotiated grid net purchases: $394.65.
Slaughter through Thursday was 427,000 head, 1,000 less than the prior week. Total slaughter for a week earlier is estimated to be 527,000 head. Actual slaughter for the week ending May 9 was 525,175 head. The average steer dressed weight was 985 lbs., 7 lbs. above the prior week.
Boxed beef prices were mixed, with the Choice cutout up $4.03 to $391.48 and the Select cutout down $3.35 to $385.65.
Feeder cattle
Feeder cattle futures were mixed for the week. The May contract was up $1.55 to $369.12, the August contract was $1.48 lower to $356.52 and the September contract was down $1.85 to $353.37.
The CME Feeder Cattle Index was down 79 cents to close at $372.44.
Corn futures closed lower despite climbing sharply after news on the U.S.-China trade summit. The July contract was down 5 cents to $4.62, and the September contract lost 6 cents to $4.68.
“More than anything, the disconnect currently seen between the market’s fundamentals and the futures complex is nauseating,” Stewart wrote on Thursday. “And, with the Cattle on Feed report expected to be bearish as well, plenty of bearishness has seeped into the market.”
The pre-report estimates for Friday’s Cattle on Feed report showed that feedlots with 1,000 head or greater will be 101.6% for cattle on feed in May. Placements in April are estimated to be 104.6%, and marketings for April are predicted at 90.7%.
Iowa: Russell Livestock in Russell sold 3,994 head on Monday. Compared to the last auction, steers under 550 lbs. sold mostly $5-11 lower, while steers 550 lbs. and heavier sold $3-10 higher, except 650-700 lbs., which sold $11 lower. Heifers sold sharply higher. Benchmark steers averaging 713 lbs. sold from $404-433, averaging $423.23.
Missouri: Joplin Regional Stockyards in Carthage sold 10,397 head on Monday. Compared to the last auction, feeder steers under 750 lbs. sold steady to $8 lower and over 750 lbs. sold steady to $7 higher. Feeder heifers under 600 lbs. sold $5-10 lower and over 650 lbs. sold steady to $10 higher. Benchmark steers averaging 764 lbs. sold from $372-377, averaging $375.94.
Oklahoma: Oklahoma National Stockyards in Oklahoma City sold 7,116 head on Monday. Compared to the last auction, feeder steers and heifers traded mostly steady. Benchmark steers averaging 782 lbs. sold from $363-382, averaging $372.34.
South Dakota: Sioux Falls Regional in Worthing sold 2,348 head on Monday. Compared to the last auction, feeder steers and heifers sold steady. Benchmark steers averaging 741 lbs. sold from $401-415, averaging $407.82. — Charles Wallace, WLJ contributing editor
