Futures found their footing earlier in the week before tumbling lower by Thursday, as market uncertainty and a lack of fundamental support continued to pressure traders.
“Buyers and sellers both lack any confidence in the stability of the market and both parties want to shorten their exposure to the volatility that has become a characteristic of everyday trading,” the Cattle Report said on Thursday.
Live cattle futures traded steadier over the week after hitting limit up on Monday but crashed lower on Thursday. The December contract gained 33 cents to close at $219, and the February contract gained a little over $2 to close at $218.95.
“Without fundamental support rising to comfort traders, it’s likely that a downward trend will remain with the market at least today, and potentially into Friday as well,” noted ShayLe Stewart, DTN livestock analyst, in her Thursday midday comments.
Cash trade through Thursday totaled about 37,000 head. Live steers sold from $222-228, and dressed steers sold from $347-355.
“Since packers own a lot of fed cattle inventory, most expect this week’s negotiated fed cattle price to be no more than steady with last week,” wrote Cassie Fish, market analyst, in The Beef on Thursday.
Cash trade for the week ending Nov. 9 totaled 79,188 head. Live steers averaged $228.69, and dressed steers averaged $358.13.
Slaughter through Thursday was about 471,000 head, compared to 456,000 head a week earlier. Total slaughter for a week earlier was estimated at 560,000 head, similar to levels seen at the same time last year. USDA was not releasing its actual slaughter report during the government shutdown.
“Some might look at slaughter volume that is 10% under prior year and realize placements during last spring were not down 10%,” the Cattle Report said. “The observation might be a sign of backed up cattle in the feedyard, but that is not the case.”
Two factors are changing the availability of finished cattle, the Cattle Report continued, heavier marketing weights and placements of dairy-beef crosses that are on feed for a year, resulting in slower turnover.
Boxed beef prices traded slightly lower over the week. The Choice cutout lost about $4 to close at $373.57, and the Select cutout lost about $5 to close at $355.03.
“Perhaps once the government reopens and statistical analysis can be ‘caught up’ with current data there might be some indication that consumer beef demand is weakening,” Fish said. “But for now, there is only speculation that the incredible domestic beef demand that was the true engine behind the bull market, has peaked.”
Feeder cattle
Feeder cattle futures were able to recover some of their earlier losses after also hitting limit up earlier in the week, but fell lower on Thursday. The November contract gained about $15 to close at $337, and the January contract gained about $3 to close at $318.45.
The CME Feeder Cattle Index lost about $7 to close at $342.42.
Corn futures saw some gains, up 13 cents on the December contract to $4.41 and up 12 cents on the March contract to $4.55.
Missouri: Joplin Regional Stockyards in Carthage sold 8,098 head on Monday. Compared to the last sale, feeder steers sold $5-15 lower and feeder heifers sold from $5 higher to $15 lower. Benchmark steers averaging 773 lbs. sold from $341-359, averaging $351.31.
Oklahoma: Oklahoma National Stockyards in Oklahoma City sold 6,387 head on Monday. Compared to a week earlier, feeder steers and heifers sold steady to $5 lower in a light test. Steer calves were selling $10-15 lower, but the market was improving and could be adjusted at the close. Heifer calves sold unevenly steady. Benchmark steers averaging 726 lbs. sold from $344-359, averaging $350.29.
South Dakota: Sioux Falls Regional sold 2,490 head on Monday. Compared to the previous sale, steer and heifer calves were not well tested, but yearling feeder steers and heifers sold $5-15 lower. Benchmark steers averaging 734 lbs. sold from $340-350, averaging $343.92.
Wyoming: Winter Livestock in Riverton sold 2,645 head on Tuesday. Compared to the previous auction, feeder steers were under pressure on an uneven market base, with instances of $5-10 lower on 400-lb. calves. Feeder heifers under 500 lbs. sold $14-16 higher on uneven market, and over 500 lbs. sold steady to $3-5 lower. — Anna Miller Fortozo, WLJ managing editor
