A rally in futures over the week was fueled by steady cash trade, strong boxed beef prices and lighter slaughter volumes.
Live cattle futures were several dollars higher. The October contract gained more than $3 to close at $189.17, and the December contract gained almost $2 to close at $188.27.
Cash trade through Thursday totaled about 50,000 head. Live steers sold from $186-188, and dressed steers sold for $296.
“Packers, on the heels of a light 59k head negotiated national purchase last week are bidding steady money this morning in Texas and Kansas,” wrote Cassie Fish, market analyst, in The Beef on Thursday. “This fact and higher boxed beef prices this morning have combined to ignite yet another rally in CME live cattle futures.”
Cash trade for the week ending Oct. 6 totaled 59,356 head. Live steers averaged $187.03, and dressed steers averaged $295.92.
Slaughter through Thursday totaled about 474,000 head, compared to 491,000 a week earlier. Total slaughter for a week earlier is projected at 611,000 head. Actual slaughter for the week ending Sept. 28 was 616,922 head. The average steer dressed weight was 941 lbs., 7 lbs. below the prior week.
“Beef plants, able to slaughter both fed cattle and cows, are finding it necessary to find more fed cattle to substitute for cow shortages,” the Cattle Report said on Thursday. “This has increased the fed slaughter over last year and has worked to keep the fed supplies current and the market leverage in the hands of sellers.
“Overall slaughter of all cattle remains well under last year, but beef production, because of heavy carcass weights of fed cattle, is up,” the Cattle Report added.
Boxed beef prices were higher, with the Choice cutout up about $10 to $309.95 and the Select cutout up about $5 to $290.73.
“Choice boxes have rallied seasonally this week and likely in response to this week’s well-advertised sub-600k slaughter, the smallest for this week since 2015,” Fish said. “Gaining about $9/cwt from a week ago may help packer margins some this week, though they are likely still red while higher cattle costs this week mean boxes had better keep going next week from the packers perspective.”
Feeder cattle
Feeder cattle futures were slightly higher over the week. The October contract gained $1.30 to close at $250.27, and the November contract gained $1.83 to close at $249.95.
The CME Feeder Cattle Index gained $1.27 to close at $249.52.
“So long as the live cattle contracts continue to trade in a stronger manner, it’s likely that feeders will be able to keep their momentum through the day’s end given that fundamental support from sales in the countryside remains strong for both calves and feeders,” ShayLe Stewart, DTN livestock analyst, wrote in her Thursday midday comments.
Corn futures dropped 10 cents apiece over the week, with the December and March contracts closing at $4.18 and $4.36, respectively.
Iowa: Russell Livestock in Russell sold 1,864 head. Compared to two weeks earlier, 750-850 lbs. steers sold mostly $3-6 higher, while other weight groups sold on a light test with a
higher undertone noted. Heifers in a light offering sold steady. Benchmark steers averaging 782 lbs. sold from $249-264.25, averaging $262.10.
Missouri: Joplin Regional Stockyards in Carthage sold 6,391 head on Monday. Compared to a year earlier, feeder steers under 500 lbs. sold $10-30 higher and feeder steers over 500 lbs. sold $2-8 higher. Feeder heifers under 550 lbs. sold $5-25 higher with heavier weights selling steady to $5 lower. Benchmark steers averaging 773 lbs. sold from $252-261, averaging $254.70.
Nebraska: Tri-State Livestock in McCook sold 2,615 head on Monday. Compared to the previous auction, steers under 600 lbs. sold $2-6 lower and over 600-700 lbs. were $6-25 lower. Heifers sold $1-5 higher. A group of steers averaging 715 lbs. sold for $271.
Oklahoma: Oklahoma National Stockyards in Oklahoma City sold 4,700 head on Monday. Compared to the previous sale, steers over 700 lbs. sold steady to $2 higher, and steers under 700 lbs. sold $7-11 higher with instances up to $20 higher. Heifers over 650 lbs. sold $5-8 higher, and heifers under 650 lbs. sold $1-5 higher. Benchmark steers averaging 782 lbs. sold from $248-257, averaging $252.65.
South Dakota: Sioux Falls Regional Cattle Auction in Worthing sold 2,596 head on Monday. Compared to a week earlier, steers 850 lbs. were sharply higher and 950 lbs. were $6 higher. Heifers 650-750 lbs. sold $7-13 higher, 850 lbs. sold mostly steady and 900 lbs. sold $4-6 higher.
Wyoming: Winter Livestock in Riverton sold 3,240 head on Tuesday. Compared to the last auction, yearling steers sold steady, with instances of $7-8 higher, and yearling heifers traded $5-8 higher, with instances of $11-12 higher. Steers under 500 lbs. sold steady, with instances of $12-20 higher, and over 500 lbs. were mostly steady, with instances of $6-8 higher. A group of steers averaging 757 lbs. sold for $253-257, averaging $255.79. — Anna Miller, WLJ managing editor
