It was a week of red on the board for the cattle market. Cash trade sold steady with a week earlier, but slaughter speeds continue to slow down and boxed beef prices are lackluster.
Live cattle futures plummeted over the week. The October contract lost $4.55 to close at $181.95, and the December contract lost $5.05 to close at $185.37.
“At this point, the nearby contracts are committed to trading lower as outside economic and pollical pressures mixed with a cash cattle market that’s trading on both sides of steady doesn’t lend traders much comfort,” ShayLe Stewart, DTN livestock analyst, wrote in her midday comments on Thursday.
Cash trade through Thursday early afternoon totaled about 70,000 head. Live steers sold from $182-185, averaging $183. Dressed steers sold from $288-290.50, averaging $289.19.
“Buying patterns are in flux,” wrote the Cattle Report on Thursday. “Instead of waiting each week until Friday afternoon, packers are taking advantage of the loss of morale caused by declining futures to make small gains in the cash prices. The buy yesterday pushed the cash back to steady with last week on some pens.”
Cash trade through the week ending Oct. 1 totaled 73,514 head. Live steers averaged $183.72, and dressed steers averaged $290.38.
“The forecast for future price of cattle seeks the impossible union of a psychological analysis of the consumer with the fundamental prediction of declining numbers of cattle,” the Cattle Report said.
The national weekly direct beef type price distribution for the week of Sept. 25 to Oct. 2 was the following on a live basis:
• Negotiated purchases: $183.87.
• Formula net purchases: $187.14.
• Forward contract net purchases: $178.97.
• Negotiated grid net purchases: $186.24.
On a dressed basis:
• Negotiated purchases: $290.41.
• Formula net purchases: $294.64.
• Forward contract net purchases: $272.64.
• Negotiated grid net purchases: $294.97.
Slaughter through Thursday was about 499,000 head, about 6,000 head less than a week earlier. Slaughter for a week earlier is estimated at 612,000 head. Actual slaughter for the week ending Sept. 23 was 626,639 head. The average steer dressed weight was 918 lbs., 1 lb. lower than the prior week.
“This break has been deep enough to raise the concerning question about what has happened to the rest of the bull market,” wrote Cassie Fish, market analyst, in The Beef on Thursday. “Seasonals tells us cash cattle and boxed beef prices will improve between now and Thanksgiving. But boxes have really struggled in September and continue to search for a bottom in early October.”
Boxed beef prices continue to sink lower. The Choice cutout lost $3.75 to close at $297.76, and the Select cutout lost $2.67 to close at $274.77.
“Packers have cut harvest in hopes of shoring up boxed beef values but instead, new lows have been made almost daily,” Fish said. “This morning, the USDA estimated boxed beef cutout value for Choice product printed at $295.61. Beef demand destruction has been hinted at for weeks and now seems an inarguable fact.”
Feeder cattle
Feeder cattle futures also sank lower over the week. The October contract lost over $7 to close at $247.50, and the November contract lost close to $7.40 to close at $250.30.
The CME Feeder Cattle Index lost 75 cents to close at $251.45.
“It comes as no surprise that the feeder cattle complex is continuing to trade lower as the live cattle market is lending virtually no support to its market and as the corn complex rallies $0.05 to $0.08 higher into Thursday’s noon hour,” Stewart said.
Corn futures found gains on the board. The December contract gained 9 cents to close at $4.97, and the March contract also gained 9 cents to close at $5.12.
Colorado: Winter Livestock in La Junta sold 701 head on Tuesday. Compared to a week earlier, trade activity and demand were moderate. Feeder steers under 500 lbs. sold mostly unevenly steady, and over 500 lbs. sold $10-16 lower with instances of sharply lower. Feeder heifers under 600 lbs. sold sharply lower on a light test, and over 600 lbs. sold $6 lower. Benchmark steers averaging 716 lbs. sold for $254.
Kansas: Winter Livestock in Dodge City sold 1,660 head on Wednesday. Compared to a week earlier, feeder steers and feeder heifers 700-900 lbs. sold steady to $2 higher. Steers and heifers 400-700 lbs. sold $8-10 lower. Benchmark steers averaging 783 lbs. sold from $249.50-256.50, averaging $255.47.
Missouri: Joplin Regional Stockyards in Carthage sold 5,192 head on Monday. Compared to a week earlier, feeder steers under 750 lbs. sold $6-9 lower, with heavier weights steady to $2 lower. Feeder heifers sold $6-10 lower. Benchmark steers averaging 730 lbs. sold from $251-263, averaging $257.72.
Nebraska: Tri-State Livestock in McCook sold 3,225 head Monday. Compared to the last auction, most lots of steers sold steady to $5 lower, except 450 lbs. and 550 lbs. traded $6-9 higher. Heifer calves sold $2-3 higher. Not enough yearling sales for a market comparison. Benchmark steers averaging 724 lbs. sold between $253-265.75, averaging $264.62.
New Mexico: Roswell Livestock Auction in Roswell sold 1,544 head on Tuesday. Compared to a week earlier, steer calves 300-350 lbs. were $2 lower, while 350-400 lbs. sold sharply lower; 400-450 lbs. were $6 higher, and 450-500 lbs. sold $13 lower; and 500-600 lbs. were $3-21 higher. Feeder steers sold steady to $5 higher, with the exception of 600-650 lbs. selling sharply lower. Heifer calves 400-500 lbs. were $17-24 lower, while 500-550 lbs. sold $9 higher and 550-600 lbs. were $3 lower. Feeder heifers 600-700 lbs. sold $10-14 higher. Benchmark steers averaging 780 lbs. sold from $210-230, averaging $225.95.
Oklahoma: Oklahoma National Stockyards in Oklahoma City sold 6,500 head on Monday. Compared to a week earlier, feeder steers sold $2-5 lower and feeder heifers sold $3-6 lower. Steer calves sold steady to $5 higher, and heifer calves sold $4-7 higher. Benchmark steers averaging 786 lbs. sold from $242-257, averaging $250.69.
South Dakota: Sioux Falls Regional Cattle in Worthing sold 4,043 head Monday. Compared to the previous auction, steer and heifer calves were too lightly tested for good comparison. Yearling feeder steers were also not well tested for comparison, but a lower undertone was evident. Yearling heifers sold unevenly steady. Benchmark steers averaging 807 lbs. sold between $243-248, averaging $247.09. — Anna Miller, WLJ managing editor
