The cattle market experienced a setback in the beginning of the week, following severe winter storms in the country. Auction receipts were light on Monday. Futures traded up and down all week but ultimately traded mostly sideways. Cash trade was mostly steady.
“Thursday served as a wild ride through the entire marketplace as both livestock and grain commodities were higher heading into the afternoon, but then took an abrupt turn and rounded out the day fully lower as traders looked to capture some profit-taking on overbought markets,” remarked ShayLe Stewart, DTN livestock analyst, in her Thursday closing comments.
Live cattle futures were higher, with the February contract up 75 cents to $142.35 and the April contract up 12 cents to $146.87.
Cash trade through midday Thursday totaled around 85,000 head.Live steers sold between $138-141, reaching as high as $143 on Thursday but averaging closer to $140. Dressed steers sold from $222-225, reaching as high as $227 on Thursday.
“No cattle traded on the Fed Cattle Exchange in a repeat of the past few weeks,” wrote the Cattle Report. “It is puzzling and disappointing to see the online forum for marketing cattle unable to receive bids consistent with those available in the country.”
Cash trade for the first week of February totaled 98,188 head—much higher than prior weeks. Live steers averaged $139.71, and dressed steers averaged $221.78.
The national weekly direct beef type price distribution for the week of Jan. 31 to Feb. 7 was the following on a live basis:
• Negotiated purchases: $139.60.
• Formula net purchases: $139.46.
• Forward contract net purchases: $140.11.
• Negotiated grid net purchases: $138.41.
On a dressed basis:
• Negotiated purchases: $221.77.
• Formula net purchases: $220.50.
• Forward contract net purchases: $214.81.
• Negotiated grid net purchases: $220.54.
Slaughter through Thursday totaled 488,000 head, 9,000 head more than a week earlier. Estimated slaughter for the first week of February is 639,000 head, a few thousand head short of the week prior. USDA reported actual slaughter for the last week of January totaled 654,902 head.
“The January slaughter volume was disappointing, but January is in the rear-view mirror,” the Cattle Report said. “Hopefully February will move the slaughter to more normalized volumes as weather improves across the Plains.”
Boxed beef prices dropped over the week, with the Choice cutout down over $6.50 to $274.82 and the Select cutout down over $7.50 to $268.95.
“Boxed beef prices are seasonally declining—no surprise there—and packer margins contracting, though from a record level for any February in history,” wrote Cassie Fish, market analyst, in The Beef.
Feeder cattle
“The direction of corn pricing continues to play a major role in replacement costs,” wrote the Cattle Report. “January and February are not large placement months and placements are not large from weekly reports.
“Attention will be focused on March through May, when cattle move off winter grazing to the feedyards and placement patterns will set the stage for fall and late year fed supplies.”
Feeder cattle futures traded mostly sideways, with the March contract unchanged at $166.72 and the April contract down 5 cents to $171.75. The CME Feeder Cattle Index gained $3.48 to close at $162.73.
Corn futures skyrocketed over the week, with the March contract up 25 cents to $6.41 and the May contract up 23 cents to $6.40.
“Many light calves will look for summer grazing, but those opportunities will depend on beneficial rains,” the Cattle Report said. “Next year’s corn crop also will be critical to meat prices and this coming year’s corn harvest.”
Earlier in the week, Stewart noted, “Receipts are expected to be light throughout sale barns as producers have largely already marketed their calves and feeders, and most of the country is thinking about getting cows ready for calving.”
Colorado: Winter Livestock in La Junta sold 1,666 head on Tuesday. Compared to a week earlier, steers under 700 lbs. sold steady to $3 higher, with an advance on 550-600 lbs.; over 700 lbs. sold steady to $1 higher. Heifers under 600 lbs. sold steady to $6 higher, and 700 lbs. sold steady to $8 higher, with an advance on 600-650 lbs. Benchmark steers averaging 720 lbs. sold between $160-165.25, averaging $164.05.
Kansas: Winter Livestock in Dodge City sold 3,858 head Wednesday. Compared to the previous auction, yearling steers 625-800 lbs. sold $3-5 higher. There was no recent comparison on steers 800-950 lbs. However, a higher undertone was noted. Steer calves 400-625 lbs. sold $10-15 higher. Feeder heifers 600-975 lbs. sold $3-5 higher. Heifer calves 400-600 lbs. sold $5-10 higher. Benchmark steers averaging 739 lbs. sold between $164-167.75, averaging $167.27.
Missouri: Joplin Regional Stockyards in Carthage sold 2,239 head Monday. Benchmark steers averaging 766 lbs. sold between $159.50-166, averaging $164.39.
New Mexico: Roswell Livestock Auction in Roswell sold 336 head Monday, with limited numbers due to weather. A small group of benchmark steers averaging 765 lbs. sold for $145.50.
Oklahoma: Oklahoma National Stockyards in Oklahoma City sold 1,830 head on Monday. Receipts were limited due to a winter storm, but demand was extremely good for the light run. Feeder steers and heifers sold $2-6 higher, with instances of $8 higher. Steer and heifer calves sold $5-10 higher. Benchmark steers averaging 778 lbs. sold between $157-164, averaging $160.46.
South Dakota: Sioux Falls Regional Livestock in Worthing sold 5,074 head Monday. Compared to the last auction, feeder steers sold steady to $4 higher, except 350-400 lbs., 450-550 lbs. and 650-700 lbs., which were $4-9 higher. Feeder heifers sold steady to $4 lower, except 400-450 lbs. and 550-600 lbs., which were $8-10 higher, while 650-700 lbs. and 800-850 lbs. traded $2-4 higher. Benchmark steers averaging 728 lbs. sold between $163.50-176.50 and averaged $169.71. — Anna Miller, WLJ managing editor
