The market traded mostly sideways over the week following the release of USDA’s Cattle on Feed report and midyear Cattle Inventory report. Cash trade was lower from a week ago, but auction markets continue to see good demand for feeders.
Live cattle futures traded mostly sideways over the week but ultimately closed slightly higher. The August contract gained 45 cents over the week to close at $136.17, and the October contract gained 85 cents to close at $141.82.
Cash trade through the week totaled about 62,000 head. Trade was steady to several dollars lower compared to a week earlier. Live steers sold from $135-145, averaging $140, and dressed steers sold from $220-230, averaging $225.
Cash trade through July 24 totaled only 69,032 head. Live steers averaged $141.31, and dressed steers averaged $227.50.
“With (packers’) ability to avoid buying cattle through the cash market with formula deals and alternative marketing agreements, it’s hard for the cash cattle market to gain any momentum when supplies are plentiful,” ShayLe Stewart, DTN livestock analyst, wrote in her Thursday midday comments.
The national weekly direct beef type price distribution for the week of July 18-25 was the following on a live basis:
• Negotiated purchases: $140.45.
• Formula net purchases: $144.76.
• Forward contract net purchases: $146.20.
• Negotiated grid net purchases: $141.79.
On a dressed basis:
• Negotiated purchases: $227.70.
• Formula net purchases: $228.04.
• Forward contract net purchases: $219.13.
• Negotiated grid net purchases: $231.39.
Slaughter through Thursday totaled 495,000 head, a couple thousand short of a week earlier. Projected slaughter for a week earlier is 665,000 head. Actual slaughter for the week ending July 16 totaled 672,680 head.
Boxed beef prices traded sideways over the week, with the Choice cutout up only a penny to $267.77 and the Select cutout up 28 cents to $240.81.
The July Cattle on Feed report noted cattle and calves on feed totaled 11.3 million head on July 1. Steers and steer calves were down 1 percent from 2021, while heifers and heifer calves were up 3 percent.
Placements in June totaled 1.63 million head, 2 percent lower than last July. Net placements were 1.56 million head. Marketings of fed cattle totaled 2.06 million head, 2 percent above 2021. Other disappearance totaled 69,000 head during June, 21 percent above 2021.
The midyear Cattle Inventory report totaled cattle and calves in the U.S. at 98.8 million head, 2 percent below last year. All cows and heifers that calved totaled 39.8 million head, 2 percent below 2021. Beef cows were down 2 percent, and beef replacement heifers were down 3 percent.
Steers 500 lbs. and over totaled 14.4 million head, down 1 percent from last July. Bulls 500 lbs. and over totaled 2 million head, unchanged from last year. Calves under 500 lbs. totaled 27 million head, down 3 percent from last summer.
Cattle and calves on feed for slaughter totaled 13.4 million head, unchanged from last year. The 2022 calf crop is expected to be 34.6 million head, down 1 percent from 2021.
“Today, genetically cattle are bigger, leaving one to wonder how the industry will respond to this next round of super tight numbers,” wrote Cassie Fish, market analyst, in The Beef. “Packers have had a lot of practice accommodating tight numbers and Saturday slaughters will be the exception not the rule as tight numbers dictate schedules.”
Feeder cattle
Feeder cattle futures also traded mostly sideways over the week but closed lower. The August contract lost 85 cents to close at $177.42, and the September contract lost $1.10 to close at $180.20.
The CME Feeder Cattle Index gained $1.88 to close at $172.55.
Corn futures found their footing and moved higher. The September contract gained 40 cents to close at $6.15, and the December contract gained 46 cents to close at $6.19.
“With the live cattle market lending no support and the corn complex unlikely to weaken ahead of the day’s close—feeders will likely round out the day lower and could be pressured come Friday despite the market still seeing excellent support in sales throughout the countryside,” Stewart wrote.
Kansas: Winter Livestock in Dodge City sold 1,150 head on Wednesday. Compared to a week earlier, steers and heifers 400-950 lbs. sold unevenly steady on very light receipts. Demand was good. Benchmark steers averaging 784 lbs. sold between $171-176.50.
Missouri: Joplin Regional Stockyards in Carthage sold 6,187 head on Monday. Compared to a week earlier, feeder steers under 750 lbs. traded $2-6 higher, and feeder heifers traded $4-7 higher. Benchmark steers averaging 782 lbs. sold between $172-174.50, averaging $173.99.
Nebraska: Bassett Livestock in Bassett sold 8,230 head Wednesday. Compared to the previous auction two weeks ago, steers 550 and 1,050 lbs. traded steady, steers 800 lbs. traded $6 lower and steers 900-1,000 lbs. traded $2-3 higher. Heifer offerings from 500-700 lbs. traded steady to $8 higher, and heifers 750-850 lbs. traded $5-9 lower, with the exception of 850 lb. spayed heifers trading $3 higher. Benchmark steers averaging 763 lbs. sold between $187-199, averaging $194.61.
Oklahoma: Oklahoma National Stockyards in Oklahoma City sold 8,000 head on Monday. Compared to a week earlier, feeder steers sold $4-8 higher, and feeder heifers sold $2-6 higher. Steer calves sold $8-10 higher, and heifer calves sold steady to $4 higher. Benchmark steers averaging 786 lbs. sold between $166.50-175.50 and averaged $172.38.
South Dakota: Sioux Falls Regional Cattle Auction in Worthing sold 2,735 head on Monday. Compared to a week earlier, feeder steers under 1,000 lbs. were not well compared, and steers over 1,000 lbs. sold $9-15 higher. Heifers under 800 lbs. were not well compared, and heifers over 800 lbs. were steady to $5 higher. A group of benchmark steers averaging 773 lbs. sold for $181. — Anna Miller, WLJ managing editor
