With the skyrocketing price of corn, cattle markets have been unable to rally and trade higher. While both live and feeder cattle futures have been hit, feeders have suffered the brunt of the blow from over $6 corn.
Live cattle contracts closed Thursday several dollars lower from the week prior. The April contract settled at $118.32 and the June contract at $115.85.
Most cash trade took place Wednesday and Thursday from $118-124. Dressed steers sold between $190-195. Cash trade for the week prior was slight at 88,624 head, with live steers averaging $122.05 and dressed steers averaging $195.87.
The Fed Cattle Exchange sold about half of their offering during their weekly Wednesday sale. Out of the total 3,470 head offered, 1,517 head sold. Heifers averaged $120 and steers $122.14. The majority of the sold animals were from Texas/Oklahoma/New Mexico, with 1,002 head averaging $120. Kansas sold 58 head for $120 and Nebraska sold 457 head for $124.
“Even though this week’s slaughter is running aggressively and most likely going to be around 650,000 to 660,000 head and boxed beef prices are higher than a year ago—feedlots don’t hold enough leverage in the current market to move the cash cattle market higher regardless of what the fundamentals are,” remarked DTN Livestock Analyst ShayLe Stewart in her midday Thursday comments.
Slaughter through Thursday totaled 478,000 head, about 20,000 head higher than the previous week. The same time last year, slaughter was at 340,000 head. The week prior’s total slaughter is projected at 640,000 head. USDA released actual slaughter data for the first week of April, which totaled 603,494 head.
Boxed beef prices have continued to climb with spring demand, and the Choice cutout closed Thursday up $1.85 to $282.31 and the Select cutout at $273.69.
The Sterling Profit Tracker reported packer margins for the week ending April 16 were at nearly $600 per head, compared to a month earlier when they were $320 per head. Last year, during the peak of the pandemic, packer margins were sitting at $444.84. The profit tracker also reported feedlots were making a higher profit at $198.01 compared to a month earlier at $42.65. The same time last year, feedlots were in the red -$215.43.
The latest Cattle on Feed report was released after WLJ press time April 24. Pre-report estimates were for higher cattle on feed and marketings for the month of March, and much higher placements. Economists predicted placements for the month would be at least 30 percent higher than the same time last year.
Feeder cattle
“Pain, sheer pain is what the feeder cattle complex is experiencing as May corn rallies 25 cents to $6.50 per bushel and July corn rallies the same amount to $6.31,” Stewart said.
“With corn prices making hellacious jumps day in and day out, the feeder cattle contracts have been trading lower; but Thursday trade is sending the contracts sharply lower.”
The April feeder cattle contract settled Thursday at $132.25 and the May contract at $137.02. Just two weeks earlier April feeders were at $147.12 and May feeders were at $151.60. CME’s latest Feeder Cattle Index was down Thursday about $5 from the week prior at $137.53.
“Until the corn market stabilizes or begins to fall lower, the feeder cattle contracts don’t have much ground to stand on as the live cattle complex isn’t having luck at rallying cash cattle prices,” she said.
Colorado: Winter Livestock in La Junta sold 903 head Tuesday. All feeder steers and heifers were too lightly tested for a comparison. A group of 15 benchmark steers averaging 789 lbs. sold for $133.
Kansas: Winter Livestock in Dodge City sold 1,945 head Wednesday. Compared to the week prior, feeder steers 700-1,000 lbs. sold $2-4 higher and steer calves 350-700 lbs. sold steady. Feeder heifers 700-950 lbs. sold steady and heifer calves 450-700 lbs. sold $3-5 higher. Benchmark steers averaging 769 lbs. sold between $138-141.
Iowa: Russell Livestock in Russell sold 5,052 head on Monday. Compared to two weeks prior, steer calves 500-600 lbs. sold $4-7 higher; 600-750 lbs. were steady to $4 higher; and steers 750-850 lbs. sold $4 higher. Heifer calves 500-650 lbs. were steady to $4 higher, and 650-800 lbs. sold mostly steady to $3 higher. Benchmark steers averaging 765 lbs. sold between $146.25-157.50, averaging $154.25.
Missouri: Joplin Regional Stockyards in Carthage sold 4,500 head Monday. Compared to the prior sale, feeder steers under 600 lbs. sold steady and steers over 600 lbs. sold steady to $3 lower. Feeder heifers under 500 lbs. sold steady while heifers over 500 lbs. sold $3-5 lower. Benchmark steers averaging 770 lbs. sold between $137-144.50.
New Mexico: Roswell Livestock in Roswell sold 1,477 head Tuesday. Compared to the last sale, there was no accurate comparison on steer calves 300-350 lbs. and 500-550 lbs. due to more attractive weighing conditions last week, but other weights sold steady to $2 lower. Feeder heifers and calves were mostly $1 lower except 300-350 lbs. and 450-500 lbs. were $2 higher. Benchmark steers averaging 506 lbs. sold between $166-174, averaging $172.22.
Oklahoma: Oklahoma National Stockyards in Oklahoma City sold 8,500 head Monday. Compared to the week prior, feeder steers and heifers sold $4-8 lower. Steer and heifer calves sold $2-4 lower. Benchmark steers averaging 760 lbs. sold between $132-137. — Anna Miller, WLJ managing editor
