A wave of sharply higher cash trade over the past week reignited momentum in the cattle futures.
Live cattle futures were several dollars higher over the week. The December contract gained about $9 to close at $230.37, and the February contract gained about $6 to close at $230.95.
The live cattle complex has grown closer to pushing the market’s resistance at its 100-day moving average.
“Until this point, traders haven’t been convinced that the market possesses enough support to break above that threshold,” wrote ShayLe Stewart, DTN livestock analyst, in her Thursday midday comments. “Upon seeing some sharply higher sales develop in the fed cash cattle market, traders have grown braver.”
Cash trade through Thursday totaled about 72,000 head. Live steers sold from $222-228, and dressed steers sold from $345-355.
“Yesterday’s cattle market action turned out to be just a pause as the negotiated fed cattle market came to life yesterday afternoon only to accelerate higher and is now at least $6-8/cwt higher than last week’s average and $3-4/cwt higher than last week’s high,” wrote Cassie Fish, market analyst, in The Beef on Thursday.
Cash trade for the week ending Dec. 7 totaled 78,833 head. Live steers averaged $221.50, and dressed steers averaged $342.39.
“Rarely does the cash side of the market see such tremendous price swings in three weeks’ time,” Fish said. “This erratic price movement makes margin management and thoughtful decision making extremely challenging. What has been magnified the past three weeks is fear and greed.”
Slaughter through Thursday totaled about 484,000 head, compared to 475,000 head a week earlier. Total slaughter for a week earlier is projected at 600,000 head. Actual slaughter for the week ending Nov. 29 was 496,077 head. The average steer dressed weight was 983 lbs., down 5 lbs. from the prior week.
“Before packer margins turn red—as wholesale beef prices make new lows for the move—packers appear desperate to run another big production schedule this week while they still have some profit and obviously needed to secure more inventory this week to pull that off,” Fish said.
Boxed beef prices were several dollars lower over the week. The Choice cutout lost about $4 to close at $358.11, and the Select cutout lost about $7 to close at $343.46.
Feeder cattle
“The feeder cattle complex has taken the brave leap of faith as it’s currently seeing its spot January contract trade above its 100-day moving average,” Stewart said.
Feeder cattle futures were higher over the week. The January contract gained about $7 to close at $343.40, and the March contract gained about $8 to close at $337.67.
The CME Feeder Cattle Index gained $2.23 to close at $344.03.
Corn futures traded sideways, up about 2 cents on the December contract to $4.35 and down a penny on the March contract to $4.46.
Iowa: Russell Livestock in Russell sold 2,217 head on Monday. Compared to the previous auction two weeks earlier, steers sold mostly $12-34 higher, while five-weight cattle were sharply higher. Heifers 600 lbs. and heavier sold $4-10 higher, while lighter heifers were sharply higher. Benchmark steers averaging 705 lbs. sold from $353-382.50 and averaged $375.50.
Missouri: Joplin Regional Stockyards in Carthage sold 12,000 head on Monday. Compared to a week earlier, at the mid-session, feeder steers under 525 lbs. sold from $35-60 higher. Heavier weights sold $5-15 higher. Feeder heifers under 600 lbs. sold $10-30 higher, and heavier weights sold $5-10 higher. Benchmark steers averaging 772 lbs. sold from $335-359, averaging $342.79.
Oklahoma: Oklahoma National Stockyards in Oklahoma City sold 7,200 head on Monday. Compared to the previous sale, at the mid-session, feeder steers over 800 lbs. sold from $6-10 higher and under 800 lbs. sold $15-30 higher. Feeder heifers were lightly tested at $6-10 higher. Steer and heifer calves were $15-30 higher with spots up to $40 higher. Benchmark steers averaging 778 lbs. sold from $340-350.50, averaging $346.23.
Texas: Lonestar Stockyards in Wildorado sold 1,171 head on Tuesday. Compared to the last auction, feeder steers traded mostly $5-7 higher. Feeder heifers traded up to $20 higher on limited comparable sales. Steer and heifer calves traded sharply higher on a light test.
Utah: Producers Livestock in Salina sold 1,320 head on Tuesday. Compared to the last auction, feeder cattle sold sharply higher on calves and yearlings. Benchmark steers averaging 758 lbs. sold for $326-353.25, averaging $346.86. — Anna Miller Fortozo, WLJ managing editor
