The market ended Thursday in a free fall, with futures plummeting down, down, down on the board and cash trade lacking support. The most recent bearish Cattle on Feed report, along with larger-than-expected beef production numbers in Thursday’s World Agricultural Supply and Demand Estimates report, contributed to the drop in the market.
Live cattle futures plummeted over the week. On Thursday, each contract lost $5 apiece. Over the week, the December contract lost more than $10 to close at $174.35 and the February contract lost nearly $12 to close at $174.47.
“This monumental meltdown, inspired by bearish USDA Cattle on Feed estimates last Friday has snowballed and effectively crushed this market,” Cassie Fish, market analyst, wrote on Thursday.
Cash trade was slow to develop over the week again. The bulk of trade took place Thursday morning, with about 30,000 head sold, although several dollars lower than a week earlier. Live steers sold from $178-181.50, and dressed steers sold from $280-287. Total trade through Thursday afternoon was about 40,000 head.
“The futures meltdown has made cattle feeders easier sellers and packers have been able to cheapen their cattle costs substantially in one week, $4 to $5/cwt,” Fish said. “Prices are weaker because of fear, not because of an increase in supply of choice, market-ready fed cattle.”
Cash trade through Nov. 5 totaled 69,520 head. Live steers averaged $184.82, and dressed steers averaged $291.95.
Slaughter through Thursday is projected at 493,000 head, a few thousand head behind a week earlier. Estimated total slaughter for a week earlier is 632,000 head. Actual slaughter for the week ending Oct. 28 was 634,701 head. The average steer dressed weight was 928 lbs., 1 lb. above the prior week.
Boxed beef prices closed lower over the week. The Choice cutout lost more than $5 to close at $299.42, and the Select cutout lost nearly $5 to close at $269.42.
Feeder cattle
Feeder cattle futures also failed to find any luck on the board. The November contract plummeted more than $13 to close at $229, and the January contract lost more than $17 to close at $224.92.
“Because of the wide daily price limits and margin call pressure and the inability of individual traders to ‘play ball’ with funds and algorithms, the market easily free falls,” Fish explained. “Traders know that until the market has exhausted the selling, prices will continue to fall. Fear and self-preservation are strong deterrents from participating in a long in the tooth blood bath.”
The CME Feeder Cattle Index lost 24 cents to close at $237.01.
Corn futures traded sideways, with the December contract down two pennies to $4.68 and the March contract down 3 cents to $4.82.
“Although establishing new contract lows in nearby feeder cattle contracts is not a significant worry given the prices in 2022, nearby contracts are trading at the lowest prices since May, creating longer-term concerns about the ability to show significant market rebounds in the near future,” DTN wrote in its Thursday midday comments.
Kansas: Winter Livestock in Dodge City sold 3,032 head Wednesday. Compared to the last auction, feeder steers 700-950 lbs. sold steady to $2 higher. Steers 600-700 lbs. sold steady to $2 lower. Steer calves 400-600 lbs. sold $10-15 higher. Feeder heifers 550-900 lbs. sold $3-7 lower. Heifer calves 400-550 lbs. sold $8-10 higher. Benchmark steers averaging 720 lbs. sold between $234-239.25, averaging $237.04.
Missouri: Joplin Regional Stockyards in Carthage sold 7,000 head on Monday. Compared to a week earlier, feeder steers and heifers sold steady to $3-7 higher. Benchmark steers averaging 741 lbs. sold from $237-254, averaging $247.77.
Nebraska: Tri-State Livestock in McCook sold 2,671 head Monday. Compared to the last auction, steer calves 450-750 lbs. sold steady to $5 higher and heifer calves 450-700 lbs. sold $2-8 higher. Benchmark steers averaging 724 lbs. sold between $240-241, averaging $240.68.
New Mexico: Roswell Livestock in Roswell sold 1,512 head on Monday. Compared to the last auction, steer calves 300-400 lbs. were sharply higher and 400-600 lbs. sold $13-17 higher. Feeder steers 600-700 lbs. sold $11-23 higher. Heifer calves 300-450 lbs. were $17-21 higher and 450-500 lbs. sold $2 lower, while 500-600 lbs. were $14-32 higher. Feeder heifers 600-700 lbs. sold $3-6 higher. Benchmark steers averaging 717 lbs. sold between $217-239, averaging $234.20.
Oklahoma: Oklahoma National Stockyards in Oklahoma City sold 9,250 head on Monday. Compared to the last comparable sale on Oct. 23, feeder steers and heifers sold mostly steady to $3 higher. Steer and heifer calves sold $3-9 higher. Demand was very strong for all classes. Benchmark steers averaging 775 lbs. sold from $230-239, averaging $234.63.
South Dakota: Sioux Falls Regional Cattle Auction in Worthing sold 4,613 head Monday. Compared to the last auction, there was too light a test of calves last week for a market comparison. Light offering last week in yearlings, although there were several strings of 950-lb. steers, which were steady to substantially higher today. Higher undertones in both steers and heifers today. Benchmark steers averaging 772 lbs. sold between $239-244.50, averaging $240.55. — Anna Miller, WLJ managing editor
