Cash trade finally picked up over the week, and futures followed its lead.
Live cattle futures were able to find some small gains over the week. The August contract gained $1.53 to close at $137.70, and the October contract gained $1.83 to close at $143.65.
Cash trade through the week was inactive at first, but it picked up by Wednesday afternoon and Thursday morning. Through Thursday, about 65,000 head sold. Live steers sold from $135-146, and dressed steers sold from $225-232.
“There’s nothing more thrilling to feedlots than when packers have to up their bids later in the week because they’ve been caught short bought,” wrote ShayLe Stewart, DTN livestock analyst, in her Thursday midday comments.
“As packers show the cash cattle market more interest, the conclusion that’s seeming somewhat undeniable is that packers are short bought and actually need cattle. The big question now is: was last week’s trade the low for the summer?”
Cash trade through the last week of July totaled 74,804 head. Live steers averaged $140.23, and dressed steers averaged $225.41.
The national weekly direct beef type price distribution for the week of July 18-25 was the following on a live basis:
• Negotiated purchases: $140.16.
• Formula net purchases: $143.42.
• Forward contract net purchases: $145.86.
• Negotiated grid net purchases: $141.14.
On a dressed basis:
• Negotiated purchases: $225.49.
• Formula net purchases: $225.47.
• Forward contract net purchases: $220.33.
• Negotiated grid net purchases: $230.79.
“Large weekly fed slaughter since Memorial Day is aiding the industry in maintaining front-end currentness during the peak summer fed cattle supplies,” wrote Cassie Fish, market analyst, in The Beef. “This week’s negotiated trade has been light, which has been the pattern, but instead of another lower week, this week cash is trading steady to a bit higher in spots. This could be the signal that this summer’s $5 price set back has come to an end.”
Slaughter through Thursday totaled about 497,000 head, a couple thousand head more than the same time a week earlier. Slaughter for the week earlier is projected at 669,000 head. Actual slaughter for the week ending July 23 was 663,390 head.
Boxed beef prices have continued to trade steady to lower. The Choice cutout lost $1.49 over the week to close at $266.28, and the Select cutout lost 46 cents to close at $240.35.
Feeder cattle
“Feeder cattle buyers have looked at their breakevens on the calves and feeders they’ve been buying and aside from expensive corn, buyers were desperately needing to see higher prices on the fat cattle side of things to make these feeder cattle prices work,” Stewart said. “And, even though this week’s slight bump isn’t where cattlemen rest easy at, it shows signs that the cash cattle market could have made its low.”
Feeder cattle futures were able to close a couple dollars higher over the week. The August contract gained $1.65 to close at $177.42, and the September contract gained $2.37 to close at $182.57.
The CME Feeder Cattle Index gained $1.20 to close at $173.75.
Corn futures were pressured downward, with the September contract down 13 cents to $6.02 and the December contract also down 13 cents to $6.06.
“This summer will start a period of smaller placements that will not be likely to change for several years as smaller supplies of replacement cattle are realized,” the Ag Center wrote in the Cattle Report. “Excess pen capacity will force feedlot buyers to overpay for feeder cattle and eventually force less efficient cattle feeders to close down some feeding facilities.”
Iowa: Russell Livestock in Russell sold 1,830 head on Monday. The sale was a special sale, and there was no trend, as the previous sale was three weeks earlier. Benchmark steers averaging 766 lbs. sold between $161-185, averaging $174.94.
Missouri: Joplin Regional Stockyards in Carthage sold 6,500 head on Monday. Compared to a week earlier, at the mid-session, feeder steers and heifers were trading steady. Benchmark steers averaging 775 lbs. sold between $174-176.
Nebraska: Tri-State Livestock in McCook sold 2,029 head Monday. Compared to the previous auction, there were not enough feeder cattle for a market test. Bawling steer and heifer calves sold unevenly steady. Benchmark steers averaging 757 lbs. sold for $182.
New Mexico: Clovis Livestock Auction in Clovis sold 1,531 head Wednesday. No comparison is available, as there has not been an auction in a few months. Benchmark steers averaging 734 lbs. sold between $166-173, averaging $168.31.
Oklahoma: Oklahoma National Stockyards in Oklahoma City sold 9,670 head on Monday. Compared to a week earlier, feeder steers and steer calves sold $2-5 higher. Feeder heifers sold steady to $3 higher, and heifer calves sold $3-4 lower. Benchmark steers averaging 780 lbs. sold between $164.50-170.75, averaging $168.97.
South Dakota: Sioux Falls Regional Cattle Auction in Worthing sold 2,633 head on Monday. Compared to the previous sale, feeder steers under 1,000 lbs. sold with steady to lower undertones, and over 1,000 lbs. sold $2-6 lower. Feeder heifers 600-650 lbs. and 850-950 lbs. sold steady to $2 lower, while other weights sold with steady to lower undertones. Benchmark steers averaging 773 lbs. sold between $182-189.50, averaging $185.79. — Anna Miller,WLJ managing editor
