While futures traded mostly sideways over the week, cash trade was at an absolute standstill, with feedlots and packers each holding out against the other.
Live futures sold sideways, with the February contract up $1.07 to $160.82 and the April contract down 20 cents to $163.62.
“Futures are overbought and there isn’t much more to say,” Cassie Fish, market analyst, wrote in The Beef on Thursday. “In the big picture, the strong likelihood that negotiated cash fed cattle prices will be higher for weeks to come is the single driving force.”
Cash trade was slow to develop over the week, with only about 10,000 head sold through Thursday morning. Live steers sold between $157-159, and dressed steers sold for $245.
“It’s difficult to break the market when you don’t own enough inventory,” Fish said. “Today, it appears the packer is content to wait until Friday afternoon to purchase cattle, hoping it will only be steady and not a $1 higher or more.”
Cash trade for the week ending Feb. 5 totaled 64,468 head. Live steers averaged $158.19, and dressed steers averaged $250.22.
The national weekly direct beef type price distribution for the week of Jan. 30 to Feb. 6 was the following on a live basis:
• Negotiated purchases: $158.33.
• Formula net purchases: $157.91.
• Forward contract net purchases: $165.19.
• Negotiated grid net purchases: $159.50.
On a dressed basis:
• Negotiated purchases: $250.09.
• Formula net purchases: $252.86.
• Forward contract net purchases: $245.43.
• Negotiated grid net purchases: $255.01.
Slaughter through Thursday totaled 494,000 head, a few thousand head short of the same time a week earlier. Estimated slaughter for a week earlier is 641,000 head. Actual slaughter for the week ending Jan. 28 was 653,208 head.
Boxed beef prices were higher, with the Choice cutout up $4.19 to $269.29 and the Select cutout up 35 cents to $254.01.
“Last week’s packer margins were still black and beef demand still solid,” Fish said. “This week, margins will have narrowed, but thanks to a stabilized wholesale beef market and expectations of a weekly slaughter of 640k to 645k head, the fundamentals support a strong cash cattle price.”
The latest monthly World Agricultural Supply and Demand Estimates (WASDE) report raised the projection for beef production in the first quarter of 2023 by 140 million pounds, but forecast lower production in the second quarter by 90 million lbs.
“It was interesting to see tighter production projected for the second quarter of 2023 on Wednesday’s WASDE report, which also gives feedlots the cue that prices could be substantially higher as well,” ShayLe Stewart, DTN livestock analyst, wrote in her Wednesday midday comments.
Thursday’s export report saw beef net sales of 16,400 metric tons (mt), with the primary markets of South Korea (4,400 mt), Japan (3,500 mt) and Mexico (2,700 mt).
Feeder cattle
“Thankfully, the momentum in the cash cattle complex has trickled its way down into the feeder cattle market, and currently buyers are being aggressive at sales in the countryside as they know that the availability of feeder cattle is just going to become thinner and thinner as the year presses on,” Stewart said.
Feeder cattle futures traded mostly sideways, with the March contract up 90 cents to $186.82 and the April contract up 65 cents to $190.72.
The CME Feeder Cattle Index was higher, up $2.16 to $182.53.
Corn futures were lower over the week, with the March contract down 5 cents to $6.70 and the May contract down 4 cents to $6.69.
Colorado: Winter Livestock in La Junta sold 5,386 head Tuesday. Compared to the last auction, steers under 400 lbs. sold $2-3 higher, 400-650 lbs. traded $5-8 higher and 650-700 lbs. were steady to $2 higher. Heifer calves under 450 lbs. sold steady to $2 higher, 450-650 lbs. traded $3-5 higher and 650-700 lbs. were $2 higher. Yearling feeder steers 700-850 lbs. sold $5-8, with instances of $10 higher. Yearling feeder heifers 700-800 lbs. sold $2-4 higher. Benchmark steers averaging 765 lbs. sold between $175.50-183.50, averaging $181.60.
Missouri: Joplin Regional Stockyards in Carthage sold 6,500 head on Monday. Compared to the week prior, feeder steers under 475 lbs. traded $5-11 higher, with heavier weights selling steady to $3 higher. Feeder heifers under 475 lbs. sold $8-15 higher, with heavier weights trading $3-6 higher. Benchmark steers averaging 774 lbs. sold between $185-186, averaging $185.24.
Nebraska: Tri-State Livestock in McCook sold 2,970 head Monday. Compared to the previous auction, steers over 700 lbs. were $2-6 higher, and heifers were steady to $6 higher. Benchmark steers averaging 730 lbs. sold between $192.50-195 and averaged $193.12.
New Mexico: Roswell Livestock in Roswell sold 1,988 head Monday. Compared to the last auction, steer and heifer calves under 400 lbs. had no comparison, 400-550 lbs. sold steady to $3 higher and 550-600 lbs had no comparison. Heifer calves over 400 lbs. sold steady to $2 higher. There were not enough sales of feeder steers and heifers for an accurate comparison. Benchmark steers averaging 761 lbs. sold between $160-170, averaging $168.91.
Oklahoma: Oklahoma National Stockyards in Oklahoma City sold 8,000 head on Monday. Compared to a week earlier, feeder steers sold $6-10 higher, with instances of $14 higher. Feeder heifers sold $5-9 higher. Steer calves sold $13-20 higher, and heifer calves sold $9-14 higher. Benchmark steers averaging 766 lbs. sold between $182-191, averaging $187.31.
South Dakota: Sioux Falls Regional Cattle Auction in Worthing sold 5,314 head Monday. Compared to the last auction, feeder steers 700-750 lbs. and heifers 600-750 lbs. sold $9-13 higher. The arctic air resulted in a smaller offering a week earlier, so there were not a lot of comparable weights to make solid comparisons. Benchmark steers averaging 722 lbs. sold between $187-199.50 and averaged $194.38.
Wyoming: Winter Livestock in Riverton sold 2,327 head Tuesday. Compared to the previous auction, steer calves under 700 lbs. sold steady to $14-15 higher. Heifer calves sold steady to $3-5 higher, with instances of $7-11 higher. Benchmark steers averaging 763 lbs. sold between $174-180 and averaged $178.18. — Anna Miller, WLJ managing editor
