During the Memorial Day-shortened trading week, futures traded mostly sideways and cash trade sales were limited.
Live cattle futures closed mostly sideways over the week. The June contract gained 60 cents to close at $249.75, and the August contract gained $1.65 to close at $241.
“Considering the negative, nearly daily news cycle about inflation, high-priced food including beef—no wonder the market has decided to keep its distance from the actual cash market,” Cassie Fish, market analyst in The Beef, wrote on Thursday.
“Futures seem comfortable keeping their sizeable difference, prepared for the worst and focused not on the tight supply of cattle but instead on the possibility of diminished beef demand or any political policy that might be viewed as bearish,” she continued.
Cash trade through Thursday totaled about 2,000 head. No market trends were noted.
“Packers have been buying more cattle with time and are attempting to limit the upside in inventory prices to limit their already hefty losses at the plant level,” Fish said.
Cash trade for the week ending May 24 was 49,783 head. Live steers averaged $260.44, and dressed steers averaged $410.25.
Slaughter through Thursday totaled about 329,000 head, compared to 427,000 head a week earlier—lower due to the Memorial Day holiday. Total slaughter for a week earlier is estimated at 528,000 head. Actual slaughter for the week ending May 16 was 528,289 head. The average steer dressed weight was 976 lbs., 9 lbs. lower than the previous week.
“The current estimate for this week’s slaughter has settled in to 455k to 465k head, which would be the smallest Memorial Day cattle slaughter in modern history,” Fish said.
Boxed beef prices were mixed over the week. The Choice cutout gained less than a dollar to close at $392.32, and the Select cutout lost 7 cents to close at $385.58.
“Beef demand will now move into summer periods for beef to play a prominent role,” the Cattle Report wrote on Thursday. “USDA Prime cuts are carving out a larger slice of the grocery offerings. Many retailers are struggling to market these cuts and often feature discounts to encourage consumption. This is a benefit for consumers who find bargains on premium cuts.”
Heavy carcasses are also changing processing specifications for some cuts, the outlet noted. Many of the rib cuts are now cutting off the lip to make ribeye steaks smaller.
USDA released its monthly Cattle on Feed (COF) report on May 22. Cattle and calves on feed as of May 1 totaled 11.6 million head, 2% above last year’s levels. Placements in April totaled 1.70 million head, 6% higher than a year earlier. Marketings in April were 1.64 million head, 10% below last year. Other disappearance totaled 52,000 head, 4% above last year.
“Today’s COF report confirmed what feeder futures have been telling us for two days,” the Cattle Report wrote on May 22. “Expect a surprise in the placement number. The actual monthly placement number at 106% is double the pre-release guesses of 103%.”
Feeder cattle
Feeder cattle futures closed several dollars lower, down $3.50 on the August contract to $353.02 and down $3.12 on the September contract to $350.25.
“Without the support of the live cattle contracts, the feeder cattle complex isn’t willing to boldly step out and trade higher by itself,” ShayLe Stewart, DTN livestock analyst, wrote in her Thursday comments.
The CME Feeder Cattle Index lost about $5 to close at $367.26.
Corn futures were lower, down 7 cents on the July contract to $4.55 and down 14 cents on the September contract to $4.82.
Many auction markets were closed May 25 in observance of the Memorial Day holiday.
Kansas: Winter Livestock in Dodge City sold 911 head on Wednesday. Compared to the previous week, feeder steers 500-950 lbs. sold $5-7 lower, but packages of seven-weight steers sold up to $7 higher. Feeder heifers 825-975 lbs. sold steady to $4 higher, and heifers 500-825 lbs. sold $4-6 lower. Benchmark steers averaging 763 lbs. sold for $363.
Nebraska: Bassett Livestock Auction in Bassett sold 3,200 head on Wednesday. A trend was not given for steers or heifers. Demand was good with several buyers and active internet bidding for weaned fall calves and yearlings. Benchmark steers averaging 782 lbs. sold from $378-407, averaging $392.13.
New Mexico: Roswell Livestock Auction in Roswell sold 542 head on Wednesday. Compared to the previous sale, steer calves 400-600 lbs. sold $5-12 lower, except 450-500 lbs. sold $10-15 higher. Feeder steers 600-700 lbs. sold $10 lower, with 900-950 lbs. $8 lower. Heifer calves sold $5-10 higher. A small group of benchmark steers averaging 759 lbs. sold for $330.
South Dakota: Ft. Pierre Livestock in Ft. Pierre sold 4,848 head on May 22. Compared to the last auction, lighter-weight steers were steady to $10 lower on limited comparisons; steers from 800-949 lbs. were $6-10 higher, with instances of $15 higher. Heifers sold unevenly steady on limited comparisons. Benchmark steers averaging 728 lbs. sold from $389-423, averaging $403.25.
Wyoming: Torrington Livestock in Torrington sold 1,839 head on Wednesday. No trends were noted as it was the first feeder special in weeks, although a lighter offering was noted. Benchmark steers averaging 738 lbs. sold from $391-403.50, averaging $398.61. — Anna Miller Fortozo, WLJ managing editor
