A favorable World Agricultural Supply and Demand Estimates (WASDE) report, sharply lower corn futures and inflation rising slower than analysts expected helped to propel cattle futures higher. Cash trade was moderate, as packers were successful in keeping prices steady.
Live cattle traded mostly sideways until Thursday’s rally, with the December contract up $1.12 to $153.07 and the February contract up 15 cents to $155.02.
Cash trade through Thursday was estimated to be 77,000 head. Live steers traded between $150-155, averaging $152.77, and dressed steers averaged $241. Cash trade was mostly steady, with trade in Kansas at $150 for live steers and at $238 for some dressed purchases. In Nebraska, live purchases traded steady at $153, with a few up to $155, and dressed purchases traded steady at $242. In the western Corn Belt, live purchases traded steady at $153, and dressed purchases traded steady to $2 higher at $242.
“There has been practically zero action in the cash cattle market this week,” Cassie Fish, market analyst for The Beef, wrote on Tuesday. “Packers have done a masterful job so far and kept their margins black and their throughput humming at the best Monday through Friday pace since Q2 2019.”
Cash trade for the first week of November totaled 88,348 head. Live steers averaged $152.03, and dressed steers averaged $241.95.
The national weekly direct beef type price distribution for the week of Oct. 31 to Nov. 7 was the following on a live basis:
• Negotiated purchases: $152.12.
• Formula net purchases: $152.85.
• Forward contract net purchases: $149.97.
• Negotiated grid net purchases: $151.75.
On a dressed basis:
• Negotiated purchases: $241.75.
• Formula net purchases: $242.55.
• Forward contract net purchases: $231.69.
• Negotiated grid net purchases: $236.90.
Slaughter through Thursday is expected to be 510,000 head, 3,000 head below the previous week. Slaughter volumes for the previous week were 667,000 head. Actual slaughter for the week ending Oct. 29 was 667,202 head. Dressed steer weights were 928 lbs., up 3 lbs. from the prior week.
“The slaughter pace continues to be aggressive, fed slaughter at 98K on Monday and estimated at 100K head yesterday,” Fish wrote on Wednesday. “Estimate for the week is 660K to 665K head, with talk of one fed plant being dark Friday and Saturday.”
Boxed beef prices were mixed, with the Choice cutout down $1.91 to $263.27 and the Select cutout up $3.77 to $236.83.
The Daily Livestock Report wrote the Choice cutout has risen $21 (8.7%) compared to the cutout value at the end of September. During the last six weeks, the biggest price increase in percentage terms has come from the chuck primal, up $37/cwt, or 19%. The second largest contributor is the rib primal, which has gained $52/cwt, or 13%, in the last six weeks.
“Wednesday’s WASDE report favors the cattle and beef markets in a mostly supportive fashion,” ShayLe Stewart, DTN livestock analyst, wrote in Wednesday’s midday comments. “Beef production for 2022 was raised by 211 million pounds as aggressive throughput on fed cattle, combined with heavier carcass weights, contributes more beef to the market.
“For 2023, beef production was decreased by 90 million pounds as the market expects few cows to be slaughtered and tighter fed cattle supplies. Quarterly steer prices for 2022’s fourth quarter jumped by $4 from last month to an average of $152. For 2023, first-quarter steer prices are anticipated to average $153 (up $2.00 from last month) while second quarter prices in 2023 are anticipated to average $154 (up $2.00 from last month as well).”
Feeder cattle
Feeder cattle followed suit, with live cattle trading sideways despite lower corn contracts. The January contract was up 62 cents to $178.62, and the January contract was up $2.28 to $181.70. The CME Feeder Cattle Index was down $2.12 to $175.51.
Corn briefly climbed to almost $7 but met resistance and fell throughout the week. The December contract lost 26 cents to close at $6.53, and the March contract was down 25 cents to $6.59.
Colorado: Winter Livestock in La Junta sold 1,572 head Tuesday. Steer and heifer calves were too lightly tested last week for a comparison. A group of steers averaging 789 lbs. sold for $170.50.
Kansas: Winter Livestock in Dodge City sold 3,597 head Wednesday. Compared to the previous auction, feeder steers 600-950 lbs. sold steady to $2 lower. Steer calves 400-600 lbs. sold $4-6 higher. Feeder heifers 650-950 lbs. sold steady to $3 lower. Heifer calves 400-650 lbs. sold $5-8 higher. Benchmark steers averaging 790 lbs. sold between $173-180, averaging $178.71.
Missouri: Joplin Regional Stockyards in Carthage sold 7,555 head on Monday. Compared to a week earlier, feeder steers under 775 lbs. traded $3-8 higher, and steers over 775 lbs. traded steady. Feeder heifers traded $5-12 higher. Benchmark steers averaging 734 lbs. sold between $178.50-183, averaging $180.03.
Nebraska: Bassett Livestock on Bassett sold 3,220 head Wednesday. Compared to the last auction, 450 lb. steers traded $13 higher, and 550 and 650 lb. steers traded $2 lower. There were a limited number of comparable offerings for heifers, with 500 lb. offerings trading $8 higher. A group of steers averaging 772 lbs. sold for $174.50.
New Mexico: Roswell Livestock in Roswell sold 2,323 head Monday. Since there was not a recent auction, a comparison could not be made. A group of steers averaging 715 lbs. sold between $155-169.50 and averaged $164.53.
Oklahoma: Oklahoma National Stockyards in Oklahoma City sold 11,000 head on Monday. Compared to a week earlier, feeder steers and steer calves sold unevenly steady. Feeder heifers were steady to $3 higher. Heifer calves over 500 lbs. were steady, and under 500 lbs. sold steady to $5 higher. Benchmark steers averaging 730 lbs. sold between $168-179 and averaged $173.56.
South Dakota: Sioux Falls Regional Cattle Auction in Worthing sold 3,407 head Monday. Compared to the previous auction, feeder steers sold steady to $4 higher, except 700-800 lbs., which were steady to $2 lower, and 950-1,000 lbs., which traded $6-9 lower. Feeder heifers sold steady to $5 lower. Benchmark steers averaging 779 lbs. sold between $180-187, averaging $182.91.
Texas: Lonestar Stockyards in Wildorado sold 1,570 head Tuesday. Compared to the previous auction, feeder steers traded mostly steady. Feeder heifers sold mostly $1-2 higher. A group of steers averaging 625 lbs. sold for $180. — Charles Wallace, WLJ editor
