Cattle futures were mixed for the week, despite a neutral-to-bullish Cattle on Feed (COF) report, higher cash trade, lower corn futures and boxed beef prices not showing any signs of faltering.
The COF report showed cattle and calves on feed for feedlots with a capacity of 1,000 head or more totaled 11.7 million head on Feb. 1. The inventory was 4% below Feb. 1, 2022. Placements in feedlots during January totaled 1.93 million head, 4% below 2022, and marketings of fed cattle during January totaled 1.85 million head, 4% above 2022.
Live cattle futures closed lower, with the April contract down $1.22 to $164.10 and the June contract down $1.65 to $159.45.
Cassie Fish, market analyst for The Beef, wrote on Tuesday that the February live cattle contract expiring at $167.50 “establishes for the record books that 2023 live cattle futures have reached the historically high territory of 2014.”
“On February 1, the high in April cattle was $163.92 and today’s low is $164.10, which illustrates how this market has spent a lot of time going sideways,” Fish wrote on Thursday. “April live cattle is just 200 points of the high it made last week. More chopping and down days in futures are likely short-term.”
Cash trade through Thursday was 15,800 head. Live steers sold between $161-166, averaging $164.12, and dressed steers sold for $262. Most sales were reported in Nebraska and Iowa, $1 higher than the previous week’s weighted average.
“Expectations for this week’s negotiated fed cattle market are higher, another buck from last week’s almost $3/cwt gain,” Fish wrote on Tuesday. “Last time cash was this high, packers were red. Not so this time with boxed beef values averaging $26/cwt last week above one year ago. Packer margins actually expanded last week, pushing back above $100 per head which is remarkable.”
Cash trade for the week ending Feb. 26 totaled 81,059 head. Live steers averaged $163.69, and dressed steers averaged $260.99.
The national weekly direct beef type price distribution for the week of Feb. 20-27 was the following on a live basis:
• Negotiated purchases: $163.69.
• Formula net purchases: $162.93.
• Forward contract net purchases: $168.
• Negotiated grid net purchases: $164.70.
On a dressed basis:
• Negotiated purchases: $261.12.
• Formula net purchases: $260.11.
• Forward contract net purchases: $248.75.
• Negotiated grid net purchases: $257.55.
Slaughter through Thursday was estimated at 501,000 head. Slaughter for the week earlier was projected to be 618,000 head, down 33,000 head from last year. Actual slaughter for the week ending Feb. 18 was 625,272 head. Average dressed steer weights were 906 lbs., up 4 lbs. from the previous week.
Boxed beef prices were higher, with the Choice cutout up 59 cents to $288.50 and the Select cutout up $1.71 to $277.58.
Feeder cattle
Feeder cattle futures were mixed, with the March contract down 65 cents to $188.57 and the April contract up 18 cents to $193.85. The CME Feeder Cattle Index was up 47 cents to $183.04.
“The cash cattle market still hasn’t seen cattle trade, but when trade does begin to develop, prices are expected to be higher, which will also bode well for the feeder cattle contracts,” ShayLe Stewart, DTN livestock analyst, wrote in Thursday’s midday comments. “Even with the slight stability found Wednesday afternoon in the corn complex, feeder cattle demand remained incredibly strong in sale barns as buyers know that the closer we get to spring, the higher prices are going to get.”
Corn futures were sharply lower, with the March contract down 23 cents to $6.37 and the May contract down 26 cents to $6.33.
Colorado: Winter Livestock in La Junta sold 1,397 head on Tuesday. Compared to the previous sale, steer calves under 650 lbs. sold steady, except 500-550 lbs. sold $3-5 higher, with instances of $10 higher. Steers 650-700 lbs. sold $2-3 higher, and over 700 lbs. sold steady to $1 higher. Heifer calves under 500 lbs. sold steady, 500-600 lbs. sold $3-5 higher and over 600 lbs. sold steady to $1 higher. Benchmark steers averaging 763 lbs. sold between $184.50-186.25, averaging $185.19.
Kansas: Winter Livestock in Dodge City sold 2,662 head Wednesday. Compared to the last auction, feeder steers and heifers 600-900 lbs. sold $2 lower; however, high quality and fancy steers and heifers sold $2 higher. Steer and heifer calves 400-600 lbs. sold $2-4 higher. Benchmark steers averaging 772 lbs. sold between $177-184.25 and averaged $179.96.
Iowa: Russell Livestock in Russell sold 1,852 head on Monday. Compared to a week earlier, steers sold steady to $3 higher. Heifers sold steady to $10 higher. Benchmark steers averaging 763 lbs. sold between $174.50-194.25, averaging $189.63.
Missouri: Joplin Regional Stockyards in Carthage sold 7,000 head on Monday. Compared to the sale a week earlier, feeder steers traded steady to $5 higher, and feeder heifers traded steady to $4 higher. Benchmark steers averaging 759 lbs. sold from $187.50-191, averaging $189.48.
Nebraska: Huss Livestock Market in Kearney sold 4,281 head Wednesday. Compared to the previous auction, steers under 650 lbs. sold steady, and over 650 lbs. sold steady to $3 higher. Heifers under 750 lbs. sold $5-10 higher, and over 750 lbs. sold steady. Benchmark steers averaging 780 lbs. sold between $186-193.25, averaging $188.15.
Oklahoma: Oklahoma National Stockyards in Oklahoma City sold 8,200 head on Monday. Compared to the previous sale, feeder steers sold steady to $2 higher. Feeder heifers sold $2-5 higher. Steer calves sold mostly steady, and heifer calves sold $3-5 higher. Benchmark steers averaging 769 lbs. sold from $174-194.50.
South Dakota: Sioux Falls Regional Cattle Auction in Worthing sold 3,692 head Monday. Compared to the previous auction, feeder steers sold $1-4 higher, except 600-700 lbs. sold steady to $1 lower. Feeder heifers sold steady to $3 higher, except 650-700 lbs. sold $6-9 lower. Benchmark steers averaging 770 lbs. sold between $187-196.50 and averaged $191.59. — Charles Wallace, WLJ editor
