Cattle futures traded mostly sideways last week, and cash trade trended higher. Slaughter numbers are becoming more consistent but are still short of the ideal weekly average.
Live cattle futures traded mostly steady but managed to gain a few cents over the week. The October contract closed 48 cents higher to $125.75, and the December contract closed 20 cents higher to $130.30. Futures rallied Thursday but were unable to push week-over-week gains very high.
Cash trade through the week was light toward the beginning but picked up a little more midweek. Live steers traded from $122-125, mostly at $124. Dressed steers traded between $195-196.
“Generally, this is a steady to strong trade, and this week’s average price will inch up significantly from last week’s $122.96 5-area average price,” wrote Cassie Fish, market analyst, in The Beef on Wednesday.
“Certainly the fall low has been confirmed two weeks ago, and now begins the slow grind higher the remainder of the year.”
Total negotiated cash trade through the week ending Oct. 10 totaled 84,959 head. Live steers averaged $123, and dressed steers averaged $195.32.
The Fed Cattle Exchange listed 4,508 head for its weekly Wednesday online sale, of which 272 head actually sold. Texas/Oklahoma/New Mexico sold the successful heifer lots for an average of $124.26. The Exchange also planned to host a special sale Thursday, but technical difficulties paused the sale.
The national weekly direct beef type price distribution for the week of Oct. 4 to Oct. 11 was the following on a live basis:
• Negotiated purchases: $123.17.
• Formula net purchases: $126.
• Forward contract net purchases: $130.
• Negotiated grid net purchases: $126.51.
On a dressed basis:
• Negotiated purchases: $195.27.
• Formula net purchases: $200.60.
• Forward contract net purchases: $197.95.
• Negotiated grid net purchases: $200.90.
Slaughter through Thursday totaled 119,000 head, bringing the week’s total to 480,000 head, a few thousand head short of the same time a week earlier. Total slaughter for the second week of October is projected to reach 657,000 head, and actual slaughter through the week of Oct. 2 totaled 639,870 head.
Boxed beef prices lost just a few dollars over the week. The Choice cutout lost about $5 to close at $280.32, and the Select cutout lost about $3.75 to close at $260.68. The Choice/Select spread is about $20, at $19.64.
“At the same time boxed beef values continue to correct, the overvalued middle meats take the big and much-needed hit, while grinding material continues to be in strong demand,” Fish said.
The Cattle Report added: “Consumer complaints about beef prices at the store highlight the fact that many stores are just now catching up with the sky-high box prices from August. The declines of box prices in September and early October will slowly work their way into pricing at the nation’s supermarkets.”
Feeder cattle
USDA released its latest World Agricultural Supply and Demand Estimates (WASDE) report, which showed higher corn yields and production. The report projected corn yield at 17.65 bushels per acre and production at 15.01 billion bushels. However, the report pointed to likely lower feeder cattle prices for 2021. The report did note the 2022 price forecast is raised, on account of tighter expected cattle supplies.
Feeder cattle futures closed mixed over the week. The October contract lost about $2 ($1.93) to close at $158.42, and the November contract gained 55 cents to close at $162.15. The CME Feeder Cattle Index lost 21 cents over the week to close at $154.01.
“Uncertainty remains as to just how demand shifts in beef markets will impact overall feeder cattle trade,” remarked Rick Kment, DTN contributing analyst, in his midday Thursday comments. “But the recent pressure in corn and focus on year-over-year cattle supply losses is helping feeder cattle futures focus on tighter overall supply levels well into 2022.”
Corn futures lost some value over the week, with the December and March contracts each losing 18 cents to close at $5.16 and $5.25, respectively.
“Ideas that lower-priced grain will result in more cattle is dubious; however, cheaper feed might cause cattle owners to feed cattle longer, adding more tonnage to the animals,” wrote the Cattle Report. “Corn prices are still high by any historical standard and currently trading almost $2/bushel higher than a year ago.”
Colorado: Winter Livestock in La Junta sold 1,967 head Tuesday. Compared to the sale a week earlier, steer calves under 700 lbs. sold $2-3 higher, and over 700 lbs. sold steady. Heifer calves under 700 lbs. sold steady to $1 higher, except 500-600 lbs., which sold $2-3 higher. Heifers over 700 lbs. sold mostly steady. Benchmark steers averaging 885 lbs. sold between $141.35-148.35, averaging $145.53.
Nebraska: Tri-State Livestock in McCook sold 2,888 head on Monday. Compared to the previous auction, on compared classes, steers were steady to $6 higher, and heifers were steady to $4 lower. A group of steers averaging 621 lbs. sold between $161.50-170, averaging $165.05.
New Mexico: Roswell Livestock in Roswell sold 1,907 head on Monday. Compared to the previous week, steer and heifer calves under 600 lbs. sold $8-10 higher, and calves and feeders over 600 lbs. were steady to $2 higher. A group of steers averaging 678 lbs. sold between $144.50-148 and averaged $146.51.
Oklahoma: Oklahoma National Stockyards sold 8,200 head Monday. Compared to the previous sale, feeder steers sold $2-4 higher, and feeder heifers sold unevenly steady. Steer calves sold $3-5 higher, and heifer calves sold steady to $2 higher. Benchmark steers averaging 779 lbs. sold between $150-161.75, averaging $155.59.
Missouri: Joplin Regional Stockyards in Carthage sold 4,500 head Monday. Compared to a week earlier, feeder steers traded steady to $3 higher, and feeder heifers traded $2-6 higher. Benchmark steers averaging 776 lbs. sold between $152-153, averaging $152.37. — Anna Miller, WLJ managing editor
