The cattle markets were alit over the past week as political speculation collided with market fundamentals. Following the Trump administration’s proposal to expand beef imports from Argentina, the markets nosedived lower.
“These recent events reminded everyone of the vulnerability that exists—despite the supply and demand fundamentals, and it has zapped the bull market’s confidence and extinguished enthusiasm,” wrote Cassie Fish, market analyst, in The Beef on Thursday. “There’s nothing worse than looking over one’s shoulder instead of looking ahead.”
Live cattle futures fared better than feeder cattle futures but still closed lower over the week. The October contract lost about $4 to close at $239.72, and the December contract lost about $7 to close at $241.17.
“Now that the industry has had time to see and absorb Agriculture Secretary Brooke Rollins’ plan to revitalize the U.S. beef herd, the market is back to trading higher as traders and industry experts saw no real issue with the proposal,” wrote ShayLe Stewart, DTN livestock analyst, in her Thursday midday comments.
USDA released a 13-page plan on Oct. 22 that is intended to “strengthen the beef industry” for both ranchers and consumers. Read more about the plan on page 13.
Cash trade through Thursday totaled about 13,000 head. Live steers sold from $233.50-240, and dressed steers sold from $370-372.
Cash trade for the week ending Oct. 19 totaled 87,831 head. Live steers averaged $239.81, and dressed steers averaged $372.28.
Slaughter through Thursday totaled about 446,000 head, compared to 466,000 head a week earlier. There was no estimate for total trade a week earlier, or actual trade for two weeks earlier, due to the government shutdown and lack of USDA National Agricultural Statistics Service reports.
“The packing industry is caught in the middle of the fray,” Fish said. “Their margins continue in the red, typical for where the industry is in the cycle, and the tightest supply of the cycle lies ahead and will be acute over the next 9 months or so.”
Boxed beef prices were several dollars higher over the week. The Choice cutout gained about $11 to close at $373.14, and the Select cutout gained over $5 to close at $354.74.
Feeder cattle
“The feeder cattle complex is still trading sorely lower, as it remains uneasy with the cattle complex being a hot ticket item this week for the president,” Stewart said.
Feeder cattle futures wildly fluctuated over the week with every new headline about beef imports or USDA’s plan. The October contract lost about $16 to close at $363.35, and the November contract lost about $20 to close at $361.45.
“The spot November contract is nearing the market’s 40-day moving average, which would be a bad threshold to cross for the market as it could signal more downward pressure,” Stewart said.
The CME Feeder Cattle Index lost about a dollar and a half, closing at $372.
Corn futures were modestly higher over the week. The December contract gained 7 cents to close at $4.28, and the March contract gained 6 cents to close at $4.41.
Missouri: Joplin Regional Stockyards in Carthage sold 6,500 head on Monday. Compared to a week earlier, at the mid-session, steers sold $10-15 lower and feeder heifers sold $5 higher to $10 lower. Benchmark steers averaging 744 lbs. sold for $375.
Montana: Miles City Livestock in Miles City sold 4,198 head on Tuesday. Compared to the previous auction, yearling steers and heifers were too lightly tested to develop any market trend. Steer calves all sold steady to firm. Heifer calves under 450 lbs. sold steady to firm, and heifers over 450 lbs. sold steady to $8 lower. A group of steers averaging 768 lbs. sold for $382.50.
Oklahoma: Oklahoma National Stockyards in Oklahoma City sold 6,800 head on Monday. Compared to a week earlier, feeder steers and heifers sold $5-15 lower. Steer calves sold steady, except 400-500 lbs. sold $10-20 higher. Heifer calves sold $5-15 lower. Benchmark steers averaging 778 lbs. sold from $365-384, averaging $378.88.
South Dakota: Sioux Falls Regional in Worthing sold 5,717 head on Monday. Compared to the previous auction two weeks ago, feeder cattle were too lightly tested to offer a good comparison, but higher undertones were noted. Benchmark steers averaging 791 lbs. sold for $374-375 and averaged $374.29. — Anna Miller Fortozo, WLJ managing editor
