Cattle futures traded above their 40-day moving average, buoyed by outside economic factors and the potential for steady to higher cash trade as packers and feedlot managers go head-to-head.
Live cattle futures were higher, with the October contract up $1.83 to $179.85 and the December contract up $2.52 to $181.12.
“The spot December contract is currently trading above its 40-day moving average, which has been a resistance point from which traders have mostly shied away from since the equity meltdown early in August,” ShayLe Stewart, DTN livestock analyst, wrote in her midday comments on Thursday. “The market’s 40-day moving average will continue to be a threshold worth monitoring as closes above that price point signal bullishness but closed beneath that point signal market skepticism and some fear.”
Cash trade was light, with about 6,000 head sold. Live steers sold for $182, and dressed steers sold for $288.
Cash trade for the week ending Sept. 15 totaled 61,496 head. Live steers averaged $182.60, and dressed steers averaged $290.63.
“The futures rally has emboldened cattle feeders who will be doing all possible to force cash prices higher after gains last week in the North,” Cassie Fish, market analyst, wrote on Thursday for The Beef. “Cash prices in the last two weeks have been their cheapest since February, but many believe this is the beginning of the Q4 rally. Cattle on Feed data suggests fed cattle supplies are adequate for Q4, but bullishness prevails.”
Slaughter through Thursday is estimated to be 493,000 head, 8,000 head above the prior week. Total slaughter for last week is estimated at 620,000 head. Actual slaughter for the week ending Sept. 7 was 547,805 head. The average steer dressed weight was 941 lbs., 8 lbs. above the prior week.
Boxed beef prices were lower, with the Choice cutout down $7.62 to $299.56 and the Select cutout down $7.38 to $288.26.
Analysts released the pre-report estimates for Friday’s Cattle on Feed report release. The consensus is that cattle on feed will be 100.7% for feedlots of 1,000 head or greater in September. Placements in August are estimated to be 98.5%, and marketings for August are predicted at 96.5%.
Feeder cattle
Feeder cattle futures climbed triple digits, with the September contract up $3.22 to $245.27 and the October contract up slightly over $4 to $243.77.
“It’s impressive to see the spot October contract well above its 40-day moving average, which has been a nearby hurdle in which traders have resistance up until this point, to take on as there simply hasn’t been enough support in the marketplace to do so confidently,” Stewart wrote on Thursday.
The CME Feeder Cattle Index gained $2.52 to $244.42.
Corn futures were higher, with the September contract up 19 cents to $4.05 and the December contract up 18 cents to $4.24.
Missouri: Joplin Regional Stockyards in Carthage sold 8,310 head on Monday. Compared to the last auction, feeder steers under 650 lbs. sold steady to $8 lower, with heavier weights selling $2-6 higher. Feeder heifers sold steady to $5 higher. Benchmark steers averaging 784 lbs. sold from $239-255, averaging $248.32.
Nebraska: Tri-State Livestock in McCook sold 2,512 head on Monday. Compared to the last auction, steers under 600 lbs. sold $6-10 higher and heifers under 600 lbs. traded $10-25 higher. There were not enough sales to show a comparison of weights over 600 lbs. A group of steers averaging 783 lbs. sold for $235.
Oklahoma: Oklahoma National Stockyards in Oklahoma City sold 6,500 head on Monday. Compared to a week earlier, steers and heifers sold $3-8 higher. Benchmark steers averaging 779 lbs. sold from $241-251, averaging $246.10. — Charles Wallace, WLJ contributing editor
