Last week, markets traded mostly uneventfully. Futures traded mostly steady, and cash trade was slow, although slightly higher. Beef demand is there, especially with Labor Day approaching, but discrepancies between cattle and boxed beef prices remain.
Live cattle futures traded mixed throughout the week and closed Thursday with the August contract down 13 cents to $123.27 and the October contract up $1.45 to $129.60.
Cash trade was slow through the week, albeit higher. Live steers sold between $121-130, and dressed steers sold between $200-$208. Cash trade through the week ending Aug. 22 totaled 95,771 head, with live steers averaging $125.62 and dressed steers averaging $201.07.
“There is little disagreement regarding the dysfunction of a live cattle market where producers are denied entrance into oversized profit margins,” wrote The Cattle Report.
“This is a condition not solved with lawsuits, government investigations, increased market transparency or changes in how cattle are marketed. It will be corrected the old fashion way—with fewer fed cattle to market. No one can tell when it will happen, only that it will happen.”
USDA recently released one of its newest reports, the National Weekly Direct Beef Type Price Distribution report, for the week of Aug. 16-23. The report showed the average live basis distribution as:
• Negotiated purchases: $125.61.
• Formula net purchases: $125.11.
• Formula contract net purchases: $126.53.
• Negotiated grid net purchases: $124.24.
For dressed purchases:
• Negotiated purchases: $200.83.
• Formula net purchases: $198.70.
• Formula contract net purchases: $192.09.
• Negotiated grid net purchases: $198.67.
The Fed Cattle Exchange offered 4,676 head during their weekly online auction Wednesday. A total of 578 head actually sold, with heifers averaging $120.22 and mixed lots averaging $119.15. All successful lots came from TX/OK/NM. Opening prices for other unsold lots ranged from $120-121.25.
The Exchange also held a special sale Thursday and offered 3,731 head, of which 1,387 head actually sold. Successful lots sold between $122-123, and reserve prices for other lots ranged from $123.50-127.
Slaughter through Thursday totaled 463,000 head, about 16,000 head behind the same time a week earlier. “There have been rumors of minor issues at four different packing plant facilities this week that could be whittling down daily throughput and putting more pressure on Saturday to make up the difference,” Cassie Fish, market analyst, said in The Beef. “Estimates for this week’s slaughter are still in the low 650s.”
She added, “As the old saying goes, ‘If it isn’t one thing, it’s another.’”
Total slaughter for the week ending Aug. 21 is estimated to reach 665,000 head. Actual slaughter for the week ending Aug. 14 totaled a disappointing 636,014 head.
Boxed beef prices closed Thursday higher, although they did not gain at the level experienced during previous weeks. The Choice cutout closed about $5.60 higher to $347.27, and the Select cutout gained about $3.20 to close at $319.59.
Feeder cattle
Feeders futures gained a little over a dollar compared to a week prior. The August contract—which ended Thursday—gained $1.18 to close at $159.45, and the September contract gained $1.55 to close at $164.45. The Feeder Cattle Index gained several dollars over the week, closing at $158.79.
Corn futures traded mostly sideways all week, with the September contract closing only 2 cents higher to $5.52 and the December contract remaining unchanged at $5.50.
“Although corn prices have eased slightly through morning trade, the inability to hang onto recent lower feed prices is adding some concern that additional pressure may develop in the feeder cattle trade, especially early 2022 contract months,” remarked Rick Kment, DTN contributing analyst, in his Thursday comments.
Iowa: Russell Livestock in Russell sold 1,804 head Monday. Compared to the sale two weeks prior, limited offerings of steer calves under 550 lbs. sold $8 lower and over 500 lbs. sold firm to $4 higher. Heifer calves under 700 lbs. sold $4 lower and over 700 lbs. sold firm to $5 higher. Benchmark steers averaging 746 lbs. sold between $163.85-172, averaging $165.02.
Kansas: Winter Livestock in Dodge City sold 1,415 head Wednesday. Compared to the last sale, feeder steers 700-1,000 lbs. sold $4-7 higher. Steers and heifers 500-700 lbs. sold $2-4 lower. Steer and heifer calves 350-500 lbs. sold $5-8 higher. Feeder heifers 700-1,000 lbs. sold steady to $3 higher. Benchmark steers averaging 776 lbs. sold between $160-165, averaging $160.33.
Missouri: Joplin Regional Stockyards in Carthage sold 4,617 head Monday. Compared to the previous sale, feeder steers under 700 lbs. traded steady to $3 lower, and steers over 700 lbs. traded steady to $4 higher. Feeder heifers traded steady to $4 higher. Benchmark steers averaging 778 lbs. sold between $152-157, averaging $155.83.
New Mexico: Roswell Livestock in Roswell sold 738 head on Monday. Compared to the previous auction, there was no accurate comparison on steer and heifer calves and feeders due to limited comparable quotes. Still, a higher undertone was noted on larger loads of good quality offerings in the 500-650 lb. range. A small group of steers averaging 527 lbs. sold between $190-191.
Oklahoma: Oklahoma National Stockyards in Oklahoma City sold 5,186 head Monday. Compared to the week prior, feeder steers sold steady to $3 higher, and feeder heifers sold $3-6 higher. Steer calves sold $4-7 lower, and heifer calves sold steady. Benchmark steers averaging 780 lbs. sold between $152-159.50, averaging $155.41. — Anna Miller, WLJ managing editor
