The selloff of futures contracts continues in the marketplace, with traders anxious about life-of-contract lows thanks to unknown circumstances.
Live cattle futures plummeted over the week, with the December contract down over $8.50 to $162.35 and the February contract down over $9 to close at $162.52.
“Many, if not most, are still wondering how this dramatic end to at least this phase of the long-term bull market came to such a quick and bloody end,” wrote Cassie Fish, market analyst, in The Beef on Thursday. “Today’s action is entirely unconvincing that a bottom is imminent.”
Cash trade sold several dollars lower than a week earlier. Total cash trade through Thursday was about 57,000 head. Live steers sold from $166-171, and dressed steers sold from $266-272.
“The cattle and beef market fundamentals are sloppy this week, but their weakness is not even close to the weakness in futures,” Fish said.
Cash trade through Dec. 3 totaled 71,464 head. Live steers averaged $174.53, and dressed steers averaged $274.86.
The national weekly direct beef type price distribution for the week of Nov. 27-Dec. 4 was the following on a live basis:
• Negotiated purchases: $174.48.
• Formula net purchases: $179.95.
• Forward contract net purchases: $177.43.
• Negotiated grid net purchases: $182.60.
On a dressed basis:
• Negotiated purchases: $275.07.
• Formula net purchases: $285.79.
• Forward contract net purchases: $280.28.
• Negotiated grid net purchases: $292.60.
Slaughter through Thursday is estimated at 502,000 head, compared to a week earlier at 494,000 head. Projected total slaughter for a week earlier is 635,000 head. Actual slaughter for the week ending Nov. 25 was 534,488 head, 105,000 head lower due to the Thanksgiving holiday. The average dressed steer weight was 940 lbs., 4 lbs. above the prior week.
“Boxed beef prices are under pressure as well, with only the rib higher on the week,” Fish said. “Based on the cuts under the most pressure, it suggests that hamburger demand is terrible.”
Boxed beef prices were lower, with the Choice cutout down nearly $10 to $289.84 and the Select cutout down nearly $6 to $258.83.
Feeder cattle
Feeder cattle futures tanked over the week. The January contract lost nearly $10 to close at $210.27, and the March contract lost more than $11 to close at $211.17.
The CME Feeder Cattle Index lost $2.46 to close at $222.31.
“Feedlots also have abandoned ideas of the need to background cattle for next spring’s placement and are quickly adopting a wait and see attitude for purchasing forward contracts,” the Cattle Report wrote on Thursday. “Feedlots can now purchase on the feeder board dollars cheaper than taking the grazing risk of low gains, missing cattle, and other hazards of the trade.”
Corn futures traded modestly higher over the week, with the December contract up 7 cents to $4.68 and the March contract up 3 cents to $4.88.
Colorado: Winter Livestock in La Junta sold 4,676 head on Tuesday. Compared to a week earlier, trade and demand was good. Feeder steers sold $2-17 higher, and feeder heifers did not have enough comparable trades for a market trend. A group of benchmark steers averaging 762 lbs. sold for $214.50.
Kansas: Winter Livestock in Dodge City sold 3,240 head on Wednesday. Compared to the previous auction, steers sold $4-8 lower. Heifers sold $5-10 lower. Benchmark steers averaging 774 lbs. sold between $217.50-222, averaging $219.36.
Missouri: Joplin Regional Stockyards in Carthage sold 9,000 head on Monday. Compared to the previous sale, feeder steers sold $5-10 higher and feeder heifers sold steady to $5 higher. Benchmark steers averaging 770 lbs. sold from $220-225, averaging $223.79.
Nebraska: Tri-State Livestock in McCook sold 1,307 head on Monday. There were not enough sales for an accurate comparison. Benchmark steers averaging 708 lbs. sold between $220-227, averaging $223.14.
New Mexico: Roswell Livestock in Roswell sold 1,514 head on Tuesday. Compared to the previous auction, steer calves 300-400 lbs. sold $2-7 higher and 400-500 lbs. sold $20-21 higher, while 500-600 lbs. were $4-20 higher. Feeder steers 600-700 lbs. sold $14-16 higher. Heifer calves 300-450 lbs. were $11-13 higher, 450-550 lbs. sold $12-19 higher and 550-600 lbs. were sharply higher. A group of steers averaging 719 lbs. sold between $200-215, averaging $206.66.
Oklahoma: Oklahoma National Stockyards in Oklahoma City sold 12,000 head on Monday. Compared to a year earlier, feeder steers and heifers were lightly tested, although a few trades sold $1-4 lower. Steer and heifer calves traded $4-9 lower. Benchmark steers averaging 722 lbs. sold from $214-226, averaging $219.84.
South Dakota: Sioux Falls Regional Cattle in Worthing sold 4,301 head on Monday. Compared to the last auction, steers 600-700 lbs. sold $2-6 lower, with the exception of 650 lb. steers trading $4 higher. Yearling steers 900 lbs. sold $5 lower, and 950 lbs. were $5 higher. Light heifers were mostly steady. Yearling heifers 950 lbs. sold $2 lower. Benchmark steers averaging 731 lbs. sold between $225-244, averaging $230.64. — Anna Miller, WLJ managing editor
