The cattle markets traded lower over the week, still skittish to outside pressures. Futures were red on the board, and cash trade was steady.
“The live cattle complex would like to rally after receiving a supportive export report Thursday morning, but instead the market is trading mostly lower, keeping in line with the earlier part of the week’s trend,” ShayLe Stewart, DTN livestock analyst, wrote in her Thursday midday comments.
Live cattle futures were lower, with the April contract down 20 cents to close at $162.15 and the June contract down $1.07 to close at $155.80.
Cash trade through Thursday totaled about 74,000 head. Live steers sold from $162-166.50, averaging $164.34. Dressed steers sold from $264-268, averaging $265.12.
Cash trade for the week ending March 19 totaled 76,283 head. Live cattle sold from $163-166, averaging $164.78. Dressed steers sold for $264.
“This is a cash-led bull market, not a futures-led bull market,” said Cassie Fish, market analyst, in The Beef on Thursday. “Price discovery may not be what it once was, but when experiencing one of the largest year-over-year drops in beef production in history, going back to 1979, there is no denying this bull market will prevail.”
The national weekly direct beef type price distribution for the week of March 13-20 was the following on a live basis:
• Negotiated purchases: $164.34.
• Formula net purchases: $167.49.
• Forward contract net purchases: $166.84.
• Negotiated grid net purchases: $169.02.
On a dressed basis:
• Negotiated purchases: $264.04.
• Formula net purchases: $266.96.
• Forward contract net purchases: $257.16.
• Negotiated grid net purchases: $267.44.
“The fact of smaller weekly slaughter numbers will be supportive of the beef market as we move into spring,” wrote the Cattle Report. “Each week, the mix of fed cattle and cows will be different and cow slaughter is definitely on a path of smaller numbers when compared to prior year, but fed cattle will be following the same trajectory.”
Slaughter through Thursday was estimated at 502,000 head, on pace with the week prior. Projected total slaughter for a week earlier is 631,000 head. Actual slaughter for the week ending March 11 was 631,428 head. The average dressed steer weight was 903 lbs., up 4 lbs. from the week prior.
Boxed beef prices were lower, with the Choice cutout down $1.17 to $282.78 and the Select cutout down $2.87 to $268.89. The Choice/Select spread was $13.89.
“March is almost over and the increase in beef demand in Q2 is on deck and end users will face the tightest fed beef production in four years,” Fish said. “This will support higher cutout values and incentivize packers to fill orders. The smaller available fed cattle supply will support cash cattle prices. It is that simple, really.”
Beef exports of 18,600 metric tons (mt) were up 5% from the previous week and 59% higher from the prior four-week average. The top three buyers were South Korea (10,800 mt), Japan (3,600 mt) and China (1,500 mt).
Feeder cattle
Feeder cattle futures were lower over the week. The March contract lost 47 cents to close at $189.02, and the April contract lost 15 cents to close at $195.
“I still find the price spread between May and August to be incredible, with a $16.17 difference,” Stewart said. “The market is braced for the clear reality that supplies are likely going to be significantly thinner in the second half of the year for feeder cattle.”
The CME Feeder Cattle Index lost 93 cents to close at $187.78.
Corn prices were mixed, with the May contract up 15 cents to $6.31 and the July contract down 6 cents to $6.10.
“Traders were leery of supporting the market before they saw what the Fed would do with interest rates and then they wanted to see how the market would react,” Stewart wrote on Wednesday afternoon. “As interest rates continue to rise, borrowing money for the ag sector will continue to be a topic that many focus on as it’s becoming a bigger expense item on most operations’ budgets.”
Kansas: Winter Livestock in Dodge City sold 3,993 head Wednesday. Compared to the last auction, feeder steers and heifers overall sold $1 lower to $3 higher. Benchmark steers 780 lbs. sold between $182.25-185 and averaged $184.27.
Missouri: Joplin Regional Stockyards in Carthage sold 8,000 head on Monday. Compared to a week earlier, at the mid-session, steers sold steady. Heifer calves weighing 310 lbs. sold at $280. A total of 450 heifers weighing 674 lbs. sold for $194, and heifers over 375 lbs. sold steady. Benchmark steers averaging 726 lbs. sold from $193-216, averaging $203.03.
Nebraska: Tri-State Livestock in McCook sold 1,264 head Monday. There were not enough sales for an accurate comparison. Benchmark steers averaging 726 lbs. sold between $187.50-196 and averaged $192.30.
New Mexico: Roswell Livestock in Roswell sold 1,397 head Monday. Compared to the last auction, steer and heifer calves were sharply lower, except 550-600 lbs. steers sold steady. Feeder steers 600-650 lbs. sold $5 higher, while 650-700 lbs. sold $7-8 higher. Feeder heifers had incomparable numbers from the previous week. Benchmark steers averaging 793 lbs. sold between $155-170, averaging $168.04.
Oklahoma: Oklahoma National Stockyards in Oklahoma City sold 5,500 head on Monday. Compared to a week prior, feeder steers sold steady to $3 higher, with most advances on heavier weights. Feeder heifers sold steady to $3 lower. Heifer calves sold steady. Benchmark steers averaging 783 lbs. sold from $181-190, averaging $185.88.
South Dakota: Sioux Falls Regional Cattle in Worthing sold 4,466 head Monday. Compared to the previous auction, feeder steers sold steady to $5 higher with instances of $14 higher, except 500-600 lbs. traded $2-7 lower. Feeder heifers sold $2-5 higher, with instances of $10 higher, except 500-600 lbs., 750-800 lbs. and 850-900 lbs. traded $1-5 lower. Benchmark steers averaging 775 lbs. sold between $194.25-206 and averaged $198.82. — Anna Miller, WLJ managing editor
