With two big USDA reports to be released at the end of the week, traders were cautious to make any big moves.
Live cattle futures were several dollars higher over the week. The August contract gained about $4.40 to close at $181.32, and the October contract gained about $3.60 to close at $183.72.
“This has been a tedious and limited week for the negotiated fed cattle trade,” wrote Cassie Fish, market analyst, in The Beef on Thursday. “Packers have either refused to bid or picked gingerly around the edges and this morning’s week-to-date trade volume total was 3.7k. Prices are generally steady and most cattle feeders have cattle priced higher. Packers are loathe to pay up since their margins are red and the dead cash trade is proof.”
Cash trade was slow to get moving until Thursday, when about 20,000 head sold. Through Thursday, about 24,000 head had sold. Live steers sold from $180-190, averaging $187.71. Dressed steers sold from $294-295.
Cash trade for the week ending July 16 was about 64,500 head. Live steers averaged $184.21, and dressed steers averaged $291.63.
The national weekly direct beef type price distribution for the week of July 10-17 was the following on a live basis:
• Negotiated purchases: $184.34.
• Formula net purchases: $184.51.
• Forward contract net purchases: $184.02.
• Negotiated grid net purchases: $184.48.
On a dressed basis:
• Negotiated purchases: $291.97.
• Formula net purchases: $290.52.
• Forward contract net purchases: $269.81.
• Negotiated grid net purchases: $294.39.
Slaughter through Thursday was estimated at 495,000 head, down about 10,000 head from the same time a week earlier. Total slaughter for a week earlier is projected at 633,000 head. Actual slaughter for the week ending July 8 was 536,330 head. The average dressed weight for steers was 892 lbs., 8 lbs. above the prior week.
“That is the second highest average steer carcass weight behind 2020’s 896 pounds,” Fish said. “Carcass weights won’t top until November and will be well over 920 pounds when the top is established. This benefits packers as it adds tonnage per head, giving them more pounds to sell.” Boxed beef prices continue their downward seasonal trend. The Choice cutout lost about $3.30 to close at $303.59, and the Select cutout lost about $4.20 to close at $275.96.
Expected to publish on Friday were the monthly Cattle on Feed Report (COF) and biannual Cattle Inventory report. Both reports were expected to be bullish.
“The week will provide a look at the mid-year cattle inventory as well as a monthly COF report,” wrote the Cattle Report on Thursday. “This year’s calf crop is expected to decline by a million calves to a little over 33 million. Next year should see the bottom for calf inventories before beginning to build in 2025. The large decline in heifers placed on feed and held for breeding is just beginning.”
Feeder cattle
“The market sees the opportunity in Thursday’s marketplace with corn prices down slightly, but the problem long term is that right now all the corn market is a weather market—meaning that the market could see drastic swings until the corn crop is harvested and feeders know what to expect for feed supplies and feed prices,” wrote ShayLe Stewart, DTN livestock analyst, in her Thursday midday comments.
Feeder cattle futures were modestly higher, with the August contract up $1.80 to $246.80 and the September contract up $2 to $249.32.
The CME Feeder Cattle Index lost about $1.85 to close at $237.83.
Corn prices continue to jump up, down and around. The September contract was up about 50 cents to close at $5.45, and the December contract gained 53 cents to close at $5.53.
“Widespread rains across much of the country is providing grazing opportunities for many pasture operators,” the Cattle Report wrote. “For many, heat has been overwhelming. Grazing will pull many replacement cattle away from grow yards and feedyards. At some point many heifers will be held for breeding—further diminishing the supply of feeder cattle available for feedlot placement. That event is currently in the early stages of development.”
Iowa: Russell Livestock in Russell sold 1,481 head on Monday. There was no recent auction for comparison. Benchmark steers averaging 732 lbs. sold from $232.50-258, averaging $257.07.
Kansas: Winter Livestock in Dodge City sold 550 head on Wednesday. Compared to a week earlier, there were not enough cattle for a market test. A group of benchmark steers averaging 748 lbs. sold for $250.
Missouri: Joplin Regional Stockyards in Carthage sold 5,000 head on Monday. Compared to a week earlier, feeder steers and heifers sold steady. Benchmark steers averaging 729 lbs. sold from $235-244, averaging $241.24.
New Mexico: Roswell Livestock in Roswell sold 1,439 head Tuesday. Compared to the last auction, steer calves under 300 lbs. sold sharply higher, 300-500 lbs. were $3-9 lower, while 500-600 lbs. sold $9 higher. Feeder steers steady on a few sales. Heifer calves under 300 lbs. were sharply higher, and 300-500 lbs. sold steady to $2 lower. Feeder heifers 600-650 lbs. sold $6 higher on light receipts. A group of steers averaging 668 lbs. sold between $240-251 and averaged $245.12.
Oklahoma: Oklahoma National Stockyards in Oklahoma City sold 6,300 head on Monday. Compared to a week earlier, feeder steers sold steady to $2 higher and feeder heifers sold steady. Steer calves sold steady, and heifer calves sold steady to $3 higher. Benchmark steers averaging 776 lbs. sold from $235-249.50, averaging $242.24.
South Dakota: Hub City Livestock in Aberdeen sold 3,281 head Wednesday. Compared to the previous auction, steers 900-949 lbs. sold $3-4 higher. There were not enough sales for an accurate comparison of heifers. Benchmark steers 774 lbs. sold between $247-264.50, averaging $256.99. — Anna Miller, WLJ managing editor
