Cattle futures rallied as traders were awaiting cash trade to develop as feedlots held out to keep prices steady. Boxed beef prices closed lower, and packers are worried about giving up the gains on the margins they achieved.
The Cattle on Feed pre-report estimates by analysts are showing on feed numbers as of May 1 at 96.5%, placements in April for 1,000-plus head capacity feedlots of 1.744 million head, and marketings in April 9.8% lower than a year ago.
Live cattle futures were higher, with the June contract up $2.52 to $165.52 and the August contract up $2.82 to $163.62.
Cash trade was slow to develop, with 28,000 head sold. Live steers selling between $170-179 and averaging $177.02. Dressed steers averaged $279.99.
Cash trade for the week ending May 14 totaled 81,474 head. Live steers averaged $174.30, and dressed steers averaged $279.36.
“The negotiated cash cattle trade this week is at a typical standstill,” wrote Cassie Fish, market analyst, in The Beef on Tuesday. “Some market watchers believe packers are short-bought and must load up this week with a larger purchase volume. Market-ready fed cattle supplies in the south are seasonally cleaned up and the northern calf feds are slow to come on— so cash prices likely will hold together very well the next few weeks.”
The national weekly direct beef type price distribution for the week of May 8-15 was the following on a live basis:
• Negotiated purchases: $174.14.
• Formula net purchases: $177.98.
• Forward contract net purchases: $171.24.
• Negotiated grid net purchases: $177.50.
On a dressed basis:
• Negotiated purchases: $279.05.
• Formula net purchases: $281.94.
• Forward contract net purchases: $263.87.
• Negotiated grid net purchases: $287.87.
Slaughter through Thursday was projected to be 504,000 head, just slightly below the previous week. The estimated slaughter for a week earlier was 646,000 head.
Actual slaughter for the week ending May 6 was 620,888 head. The average dressed steer weight was 895 lbs., up 5 lbs. from the prior week.
Boxed beef prices were lower, with the Choice cutout down over $7 to $298.31 and the Select cutout down 97 cents to $283.61.
“Wholesale beef prices have continued with its correction this week, printing this morning at $298.51, up $0.36,” Fish wrote on Thursday. “The market is down just a little over $11/cwt from the spring high. This week’s break in boxed beef prices can only be offset by lower cattle costs for packers which is why the packer is insisting cattle feeders sell lower this week.”
Feeder cattle
Feeder cattle climbed higher due to the weakness of corn, with the May contract up $1.97 to $206.10 and the August contract up $8.43 to $234.50. The CME Feeder Cattle Index was up $3.21 to $202.61.
Corn futures closed lower, with the July contract down 27 cents to $5.55 and the September contract down 20 cents to $4.95.
Kansas: Winter Livestock in Dodge City sold 1,401 head Wednesday. Compared to the previous auction, feeder steers 600-950 lbs. sold $6-9 higher. Feeder heifers 750-975 lbs. sold steady. Heifers 600-750 lbs. sold $5-6 higher. Benchmark steers averaging 787 lbs. sold between $203.25-207.50 and averaged $203.43.
Missouri: Joplin Regional Stockyards in Carthage sold 5,972 head Monday. Compared to the last auction, feeder steers sold $3-6 higher. Feeder heifers sold $6-10 higher, with some 4-5 weight heifers up to $15 higher. Benchmark steers averaging 737 lbs. sold between $204-220 and averaged $208.70.
Nebraska: Bassett Livestock in Bassett sold 4,990 head Wednesday. Compared to the previous auction, steers 550-700 lbs. traded steady to $14 higher. Comparable heifer offerings 400-550 lbs. traded steady to $9 lower and 600 lbs. traded $9 higher. Benchmark steers averaging 704 lbs. sold between $233.50-238 and averaged $237.43.
Oklahoma: Oklahoma National Stockyards in Oklahoma City sold 4,316 head Monday. Compared to the last auction, feeder steers and steer calves sold steady to $2 higher. Feeder heifers and heifer calves traded steady. Benchmark steers averaging 771 lbs. sold between $200-209, averaging $203.21. — Charles Wallace, WLJ edit
