Live cattle futures traded higher, while feeder cattle futures tried to find recovery. Cash trade was slim, and prices were lower, although that is to be expected during the week of a holiday.
Live cattle futures closed higher Tuesday, with the December contract up 25 cents to $135.52 and the February contract up $1.65 to $136.92.
“The technical rally stemmed from trader’s willingness to move the market higher, as fundamentally speaking, the market is still in a holiday slump as boxed beef prices are veering lower,” ShayLe Stewart, DTN livestock analyst, remarked in her Tuesday closing comments.
Total cash trade through Tuesday was less than 10,000 head. Steers sold mostly at $135, about $2 less than the week earlier. On the formula side, animals sold between $223-224. Cash trade for the week ended Dec. 19 totaled only 48,733 head. Live steers sold for $137.31, and dressed steers sold for $218.33.
“It is not unusual to see fed cattle prices soften as packer holiday needs decline,” remarked Cassie Fish, market analyst, in The Beef. “It is also not unusual to see fed cattle prices advance in January on through Q1, and that is in the cards as well for this market.”
The national weekly direct beef type price distribution for the week of Dec. 13-20 was the following on a live basis:
• Negotiated purchases: $137.72.
• Formula net purchases: $143.07.
• Forward contract net purchases: $137.91.
• Negotiated grid net purchases: $143.20.
On a dressed basis:
• Negotiated purchases: $218.31.
• Formula net purchases: $226.60.
• Forward contract net purchases: $205.87.
• Negotiated grid net purchases: $220.68.
Slaughter through Tuesday totaled 240,000 head, a few thousand head short of the same time a week earlier. Slaughter for the week is likely to be lower due to the holiday. Total slaughter for the week ended Dec. 20 is projected to reach 657,000 head. Slaughter for the first week of December is estimated at 682,269 head.
Boxed beef prices continue to trend lower. Compared to the previous Thursday, the Choice cutout lost about $1.50 to close at $261.39 on Tuesday, and the Select cutout lost about $1.75 to close at $249.92.
“Packer margins are still record wide, and when including revenue from all boxed beef sales, last week netted over $300 per head,” Fish said.
Feeder cattle
Feeder cattle futures saw some gains Tuesday but ultimately closed lower compared to the previous week. The January contract lost about $1.70 to close at $160.85, and the March contract lost $2.50 to close at $161.82.
Regarding Tuesday’s rally, Stewart said: “The rally comes as a pleasant surprise as the market was anticipating a week of entirely lower trade given that it’s the week of Christmas and the holidays usually blanket the market with a lethargic tone.”
Corn futures gained some value, closing just under $6. The March contract gained 7 cents to close at $5.98, and the May contract also gained 7 cents to close at $5.99.
“Even the best of winter weather can present its own problems to those feeding cattle. This year has been blessed with mild open weather conditions that have led to optimum gain for cattle on feed,” the Cattle Report wrote.
“This past week witnessed the first week for carcass weights to exceed last year when backed up supplies of fed cattle couldn’t find slaughter slots. Now we might find excess tonnage of beef from heavy cattle that have performed well in all regions of the country.”
Many auction markets closed their doors the week of Christmas, out on holiday until after New Year’s.
Missouri: Joplin Regional Stockyards in Carthage sold 5,500 head Monday. Compared to a week earlier, feeder steers traded steady. Feeder heifers under 550 lbs. sold steady, with heavier weights trading steady to $3 higher.
New Mexico: Roswell Livestock Auction in Roswell sold 1,050 head on Monday. Compared to a week earlier, there was a very uneven market on steer and heifer calves, mostly $2-4 higher, with instances of $9-16 higher. Feeders over 600 lbs. sold $6 higher on comparable quotes. Benchmark steers averaging 709 lbs. sold between $144-155, averaging $152.23.
South Dakota: Sioux Falls Regional Cattle Auction in Worthing sold 2,522 head Monday. Compared to a week earlier, feeder steers 550 lbs. and under sold $1-4 higher, 550-650 lbs. sold $1-3 lower, 650-700 lbs. sold steady to $3 higher, 700-750 lbs. sold steady to $2 lower and 1,000-1,050 lbs. sold $4-6 lower. Feeder heifers 350-500 lbs. sold $1-3 lower, 500-650 lbs. sold $3-5 higher and 650-750 lbs. sold $1-5 lower. Benchmark steers averaging 787 lbs. sold between $155-162, averaging $156.58. — Anna Miller, WLJ managing editor
(Editor’s note: Due to the Christmas holiday, WLJ went to press Wednesday morning. This report only includes information released as of Tuesday afternoon.)
