Cattle futures posted stronger gains during the Presidents Day holiday-shortened week, supported by tight supplies and lighter slaughter totals.
Live cattle futures closed several dollars higher. The February contract gained $5 to close at $247.50, and the April contract gained about $3 to close at $243.42.
“It would appear as though the nearby contracts are trading higher, although no trade has developed yet in the fed cash cattle market, as traders know that supplies of market-ready cattle are going to be thin through the first quarter and potentially partway through the second quarter, which may be part of the reason why the February through June contracts are higher,” wrote ShayLe Stewart, DTN livestock analyst, in her Thursday midday comments.
Cash trade through Thursday totaled less than 1,000 head. No market trends were noted.
Cash trade for the week ending Feb. 15 totaled 59,651 head. Live steers averaged $245.26, and dressed steers averaged $381.16.
The national weekly direct beef type price distribution for the week of Feb. 9-16 was the following on a live basis:
• Negotiated purchases: $245.30.
• Formula net purchases: $244.49.
• Forward contract net purchases: $241.22.
• Negotiated grid net purchases: $250.62.
On a dressed basis:
• Negotiated purchases: $381.09.
• Formula net purchases: $384.53.
• Forward contract net purchases: $366.11.
• Negotiated grid net purchases: $375.75.
Slaughter through Thursday was estimated at 427,000 head, compared to 454,000 head a week earlier. Total slaughter for a week earlier is projected at 541,000 head. Actual slaughter for the week ending Feb. 7 was 538,907 head. The average steer dressed weight was 981 lbs., the same as the prior week.
“A most harmful market outcome is a market where both processors and cattle feeders are posting losses. The slaughter is likely to remain near the current range for the coming weeks as packers adjust to the (Tyson) plant closing and new adjusted slaughter rates in the remaining plants,” the Cattle Report said on Thursday.
Boxed beef prices traded steady to lower over the week. The Choice cutout gained about 30 cents to close at $365.17, and the Select cutout lost about $3 to close at $359.79.
“Uncertainty regarding the potential for a strike at the JBS Greeley, CO, facility continues to loom,” wrote Cassie Fish, market analyst, in The Beef on Thursday. “And packer margins have edged into monstrous losses, a result of record high fed cattle prices last week and sluggish seasonal beef demand.”
Analysts expected Friday’s Cattle on Feed report to show cattle on feed as of Feb. 1 at 98.5% of last year. Placements for January are expected to be 96.7%, and marketings at 87%.
Feeder cattle
Feeder cattle futures closed several dollars higher. The March contract gained about $5 to close at $370.27, and the April contract gained about $4 to close at $367.65.
The CME Feeder Cattle Index gained a couple of dollars to close at $376.02.
Corn futures were slightly lower, down about 6 cents to $4.25 on the March contract and down about 5 cents on the May contract to $4.36.
Iowa: Russell Livestock in Russell sold 5,855 head on Monday. Compared to the last auction, steers 550 lbs. and under sold sharply lower, while steers over 550 lbs. sold mostly steady to $10 higher. Heifers sold $12-21 higher, except 650-700 lbs. sold $2 lower. Benchmark steers averaging 727 lbs. sold between $387-424, averaging $404.60.
Missouri: Joplin Regional Stockyards in Missouri sold 10,500 head on Monday. Compared to a week earlier, at the mid-session, feeder steers sold from $5 lower to $15 higher. Feeder heifers sold from $10 lower to $10 higher. Benchmark steers averaging 783 lbs. sold from $357-387.50, averaging $366.87.
Nebraska: North Platte Stockyards in North Platte sold 1,995 head on Tuesday. Compared to the last auction, steers and heifers sold mixed to mostly higher. Benchmark steers averaging 774 lbs. sold between $390-405, averaging $398.90.
Oklahoma: Oklahoma National Stockyards in Oklahoma City sold 6,500 head on Monday. Compared to a week earlier, at the mid-session, feeder steers sold steady to $4 higher and feeder heifers sold $5-10 higher. Steer calves sold mostly steady, and heifer calves under 500 lbs. sold steady to $5 higher while over 500 lbs. sold $4-8 lower. Benchmark steers averaging 780 lbs. sold from $364-390, averaging $372.93.
South Dakota: Sioux Falls Regional in Worthing sold 5,666 head on Monday. Compared to the last auction, feeder steers sold steady to $5 higher, with instances of $10 higher. Feeder heifers traded unevenly steady. Benchmark steers averaging 726 lbs. sold between $393-431, averaging $405.86. — Anna Miller Fortozo, WLJ managing editor
