Strong demand in the countryside, along with lower corn prices, sent feeder cattle soaring higher this week. Cash trade was slow but steady, and numbers will likely be lighter than a week earlier.
Live cattle futures traded steady over the week, with the April contract up 70 cents to $164.80 and the June contract up 22 cents to $159.67.
“It’s no surprise that the live cattle contracts are trading lower with no cash cattle trade having been reported and after seeing Thursday morning’s pitiful export report,” ShayLe Stewart, DTN livestock analyst, wrote in her Thursday midday comments. “Traders are trying to be patient as they know that feedlots will likely push the cash cattle market higher again this week, but the pain in waiting the week out is seeming to get to them.”
Cash trade was light through Thursday early afternoon, with only about 11,000 head sold. Live steers sold from $162-165, and dressed steers sold for $265.
Cash trade for the week ending March 5 was 90,533 head. Live steers averaged $164.94, and dressed steers averaged $264.59.
“Talk of another cooler cleaning for next week is making the rounds and considering last week’s fairly big negotiated trade volume, this week’s trade may be just fully steady,” wrote Cassie Fish, market analyst, in The Beef on Thursday. “There have been big gains for five consecutive weeks totaling almost $10/cwt. A pause would not be unusual.”
The national weekly direct beef type price distribution for the week of Feb. 27 to Mar. 6 was the following on a live basis:
• Negotiated purchases: $164.87.
• Formula net purchases: $165.28.
• Forward contract net purchases: $171.91.
• Negotiated grid net purchases: $167.64.
On a dressed basis:
• Negotiated purchases: $264.70.
• Formula net purchases: $262.88.
• Forward contract net purchases: $251.85.
• Negotiated grid net purchases: $259.79.
Slaughter through Thursday was 502,000 head, a thousand head more than a week prior. Projected total slaughter for a week earlier is 629,000 head.
Actual slaughter for the week ending Feb. 25 was 613,681 head. The average dressed steer weight was 902 lbs., down 4 lbs. from the previous week.
Boxed beef prices were lower over the week, with the Choice cutout down about $4 to $284.60 and the Select cutout down about $1.50 to $276.05.
“Boxed beef prices will be very strong seasonally in Q2 and may easily trade well over $300/cwt,” Fish said. “Beef 50s printed at $130/cwt yesterday, a new high for 2023 and the highest since April 2022.”
Beef net sales of 5,600 metric tons (mt) for 2023, a marketing-year low, were down 31% from the previous week and 67% from the prior four-week average, Stewart said. The three largest buyers were Japan (3,200 mt), Mexico (1,400 mt) and China (500 mt).
“Wednesday’s (World Agricultural Supply and Demand Estimates) report shared exciting news for the cattle and beef markets. Production for 2023 was increased by 170 million pounds, which largely stems from more aggressive beef cow slaughter than originally assumed,” Stewart said on Wednesday.
“The first three quarters of 2023 saw production increases to contribute to the 170 million additional pounds, but the fourth quarter remained unchanged. Quarterly price projections showed a bullish outlook for steer prices as all four quarters of 2023 saw a price increase.”
Feeder cattle
Feeder cattle contracts were several dollars higher over the week, reaching just under $200. The March contract gained nearly $5 to close at $193.07, and the April contract gained nearly $6 to close at $199.15.
The CME Feeder Cattle Index gained over $5 to close at $188.72.
Corn futures plummeted, with the March contract down 19 cents to $6.18 and the May contract down 22 cents to $6.11.
“The market’s nearly unbelievable strength is stemming from two factors: deteriorating corn prices and phenomenal countryside demand,” Stewart said.
Kansas: Winter Livestock in Dodge City sold 2,469 head on Wednesday. Compared to a week earlier, feeder steers 800-950 lbs. sold $2-4 higher, and steers 600-800 lbs. sold steady to $3 lower. Steer calves 400-600 lbs. sold $6-7 higher. Heifers 400-950 lbs. sold steady to $2 higher. Benchmark steers averaging 772 lbs. sold between $178-186, averaging $181.33.
Missouri: Joplin Regional Stockyards in Carthage sold 9,000 head Monday. Compared to the previous auction, at the mid-session, feeder steers and heifers were steady. Benchmark steers averaging 724 lbs. sold between $187-203, averaging $193.92.
Nebraska: Tri-State Livestock in McCook sold 2,475 head Monday. Compared to the last auction, steers sold steady to $5 higher, and heifers were steady to $8 higher. Benchmark steers averaging 741 lbs. sold between $203.50-207, averaging $204.49.
New Mexico: Roswell Livestock in Roswell sold 1,458 head Tuesday. Compared to the previous auction, steer calves 350-400 lbs. sold $8 higher, 350-400 lbs. were steady and 500-550 lbs. traded $5-6 lower. Heifer calves 350-400 lbs. traded $4 higher, 400-500 lbs. were steady to $3 lower, 500-550 lbs. traded $7-9 higher and 550-600 lbs. sold $2-3 lower. Feeder steers and heifers had insufficient numbers last week for a comparison. A group of steers averaging 769 lbs. sold between $161-170 and averaged $168.51.
Oklahoma: Oklahoma National Stockyards in Oklahoma City sold 11,000 head Monday. Compared to the previous auction, at mid-session, feeder steers and heifers were not well tested in early rounds but a higher undertone was noted. Steer calves sold $1-5 higher, with an instance of $20 higher on 400-500 lbs. Heifer calves opened steady. Benchmark steers averaging 717 lbs. sold between $194.50-198.50 and averaged $196.27.
South Dakota: Sioux Falls Regional Cattle in Worthing sold 3,795 head Monday. Compared to the last auction, feeder steers sold $2-5 higher, with an instance of $14 higher, except 400-450 lbs. were $2-3 lower. Feeder heifers sold $2-4 higher, with instances of $7 higher, except 500-600 lbs. and 900-950 lbs. were $2-4 lower. — Anna Miller, WLJ managing editor
