The cattle market traded anxiously as it waited to see how the Russia/Ukraine conflict would progress, and it ultimately plummeted lower once it was confirmed Thursday that Russia invaded Ukraine.
“The futures markets are, of course, more sensitive to the global panic of the day, and Thursday’s dramatic chart action will carry a long-term legacy that will either last as the pivot point putting an end to the past month’s upward trend or require some serious correction in the coming days,” remarked Elaine Kub, DTN contributing analyst, in her Thursday closing comments.
Live cattle futures posted several dollars lower, with the February contract down $2.88 to $140.52 and the April contract down nearly $4.50 to $142.30.
“Russia invaded Ukraine. The implications are not known, but markets don’t like uncertainty and this ill-advised move will certainly ratchet up tensions between east and west, returning the situation to the Cold War era, when each side was constantly on alert to new developments that might lead to another world war,” wrote the Cattle Report.
There was some cash trade through the week, with about 52,000 head sold through Thursday morning. Live steers traded from $138-145, averaging closer to $143. Dressed steers sold between $225-229.
Cash trade through the week ending Feb. 18 nearly topped 100,000 head, reaching 98,691 head. Live steers averaged $142.37, and dressed steers averaged $225.97.
The national weekly direct beef type price distribution for the week of Feb. 14 to Feb. 21 was the following on a live basis:
• Negotiated purchases: $142.30.
• Formula net purchases: $142.21.
• Forward contract net purchases: $140.60.
• Negotiated grid net purchases: $140.74.
On a dressed basis:
• Negotiated purchases: $226.03.
• Formula net purchases: $225.31.
• Forward contract net purchases: $215.60.
• Negotiated grid net purchases: $222.24.
Slaughter through Thursday totaled 478,000 head, about 10,000 head short of a week earlier due to Presidents Day. Slaughter through Feb. 17 is estimated at 663,000 head. Actual slaughter for the week ending Feb. 12 was 670,795 head.
Boxed beef prices continue to trend lower. The Choice cutout lost about $10 over the week to close at $259.24, and the Select cutout also lost about $10 to close at $254.55. On Tuesday, the Select cutout was actually trending higher than the Choice cutout, with the Select cutout at a $2 premium. This is the first time the Choice/Select spread was inverted since 2017.
“Wholesale boxed beef values are in the process of bottoming and will move higher, possibly significantly, in March, April and May,” wrote Cassie Fish, market analyst, in The Beef. “Packer margins, which still netted over $400 per head last week, will likely bottom soon also. The Choice/Select spread has likely bottomed too.”
Feeder cattle
“It’s hard to say if the volatility that’s spilling over from the feed markets is entirely due to Russian aggression and geopolitical trade risk, or how much of it might instead be related to USDA’s new baseline 2022 acreage projections, which suggested 92 million acres of corn could be planted this spring,” Kub said.
“For now, though, $7 nearby corn futures and a European war are not positive for the feeder cattle market.”
Feeder cattle futures tanked over the week. The March contract lost about $7 to close at $159.10, and the April contract also lost about $7 to close at $163.80.
The CME Feeder Cattle Index lost about 32 cents to close at $161.82.
Corn futures, of course, skyrocketed higher. The March contract gained 45 cents to close at $6.95, and the May contract gained 41 cents to close at $6.90.
Iowa: Russell Livestock in Russell sold 5,214 head Monday. Compared to the previous auction, steer calves under 550 lbs. sold sharply higher, 550-750 lbs. were $2-6 higher and over 750 lbs. sold mostly steady to $4 lower. Heifer calves under 600 lbs. were also sharply higher; over 600 lbs. were mostly steady to $5 higher. Benchmark steers averaging 720 lbs. sold between $163-179.75, averaging $173.31.
Kansas: Winter Livestock in Dodge City sold 2,522 head Wednesday. Compared to the last auction, feeder steers 650-975 lbs. sold $3-5 lower. Steer calves 350-650 lbs. sold $6-10 higher. Feeder heifers 625-900 lbs. sold $3-4 lower. Heifer calves 400-625 lbs. sold $5-7 higher. Benchmark steers averaging 726 lbs. sold between $161.50-169, averaging $167.16.
Missouri: Joplin Regional Stockyards in Carthage sold 7,500 head Monday. Compared to a week earlier, feeder steers and heifers traded steady. Benchmark steers averaging 762 lbs. sold between $157-163, averaging $162.25.
Nebraska: Tri-State Livestock in McCook sold 1,690 head Monday. Compared to the last auction, steers were steady, and heifers were steady to $6 higher. Benchmark steers averaging 730 lbs. sold between $162.50-169.50 and averaged $165.13.
New Mexico: Clovis Livestock in Clovis sold 2,439 head Wednesday. Compared to the last auction, feeder steers and heifers traded mostly steady. Steer and heifer calves traded mostly firm to $6 higher. Benchmark steers averaging 784 lbs. sold between $151-155.75 and averaged $155.15.
Oklahoma: Oklahoma National Stockyards in Oklahoma City sold 14,000 head Monday. Compared to the previous sale, feeder steers sold steady to $1 lower, and heifers sold steady to $2 higher. Steer calves sold steady to $3 lower, and heifer calves sold $1-3 higher. Benchmark steers averaging 769 lbs. sold between $151-159, averaging $155.07
South Dakota: Sioux Falls Regional in Worthing sold 3,991 head Monday. Compared to the last auction, feeder steers sold steady to $5 higher, except 800-850 lbs., which were steady to $2 lower, and heifers were steady to $5 lower. Benchmark steers averaging 771 lbs. sold between $160-171.50, averaging $166.70.
Wyoming: Torrington Livestock in Torrington sold 2,989 head Wednesday. Compared to the last auction, steer and heifer calves traded $3-5 lower on comparable trades. Benchmark steers averaging 777 lbs. sold between $155.50-165.50 and averaged $162.01. — Anna Miller, WLJ managing editor
