Cash trade was lackluster last week with little to no movement in prices, while boxed beef prices rose seasonally. On June 23, both the Cattle on Feed and Inventory reports were released and the market rallied on Monday, but lost some ground as the week progressed.
Live cattle futures started the week higher, but ended lower with the August contract at $122.50 and October at $128.15.
“You could argue the market’s higher boxed beef prices should be a rallying torch, and it most certainly adds positive steam to the market’s current,” ShayLe Stewart, DTN livestock analyst, remarked. “But without seeing substantially higher cash cattle trade, the market is still left with some unsupported sides.”
Cash trade was modest and prices were trading steady throughout the week. Live steers traded between $119-124 and dressed steers traded between $195-201. Formula cattle traded between $193-196. Cash trade a week earlier totaled 76,804 head—about the same as a week prior. Live steers averaged $120.96 and dressed steers averaged $197.04.
“The convergence of several bullish events are weighing on the market this week. Smaller show lists and rising box prices have triggered resistance to small gains offered in packer bids,” The Cattle Report said. “Asking prices in the north were mainly $126 and $123 and expectations were to achieve those prices.”
The Fed Cattle Exchange offered 7,773 head Wednesday, of which 1,085 head sold (436 heifers, 649 steers). Steers averaged $119.78 and heifers averaged $119.14. Texas/Oklahoma/New Mexico offered the brunt of the listings and sold all 1,085 successful lots.
Slaughter for the week through Thursday was expected to be 477,000 head, 10,000 head above last week. USDA reported actual slaughter data for the week ending July 17, totaling only 650,315 head. The USDA National Weekly Fed Cattle Comprehensive report showed carcass weights up 7 lbs. to 866 lbs.—22 lbs. above 2019.
“Cattle owners are insisting on a fair share of that margin and this week will test their ability to increase their trade leverage,” The Cattle Report wrote. “Packers, knowing supplies are dwindling, extended delivery times the past few weeks and are able to hold off sharply higher prices up until now.”
Boxed beef prices were higher this week. The Choice cutout closed at $275.22—$7.29 above last week—and the Select cutout was $5.92 higher for the week, closing at $256.82.
Beef net sales of 22,500 metric tons (mt) were reported for the period ending July 22, down 11 percent from the previous week, but up 28 percent from the prior four-week average. Exports of 19,100 mt were down 11 percent from the previous week, but up 4 percent from the prior four-week average. The primary destinations were South Korea (5,100 mt), Japan (4,400 mt), China (3,100 mt), Taiwan (1,700 mt) and Mexico (1,500 mt).
Feeder cattle
As with live cattle, feeder cattle traded higher at the beginning of the week, but traded lower by mid-week due to higher corn contracts.
August feeder cattle closed at $158.50 and September closed at $161.95. The CME Feeder Cattle Index climbed higher $1.97 for the week, closing at $154.
“Feeder cattle futures have been lackadaisical in their trade over the last month as the corn market has given the complex an opportunity to rally and calf buyers have hit the early summer sales with immense aggression,” Stewart wrote. “But now that the spot August contract has come up against resistance at $162, the market sits and ponders how much true upside there is.”
Corn contracts were up and down for the week but closed slightly higher, with September at $5.58 and December closing at $5.56 a bushel.
Oklahoma: Oklahoma National Stockyards in Oklahoma City sold 8,494 head Monday. Compared to the week prior, feeder steers and heifers sold $2-5 higher. Steer calves were $4-6 higher. Heifer calves $1- 4 higher. Demand moderate to good. Benchmark steers averaging 777 lbs. sold between $154-162, averaging $156.26.
Missouri: Joplin Regional Stockyards in Carthage sold 4,683 head Monday. Compared to the previous auction, feeder steers under 650 lbs. traded steady, weights over 650 lbs. traded steady to $4 higher. Feeder heifers traded steady. Benchmark steers averaging 769 lbs. sold between $151-160, averaging $156.03.
Nebraska: Bassett Livestock Auction in Nebraska sold 6,790 head Wednesday. Compared to the sale two weeks earlier, steers 500-600 lbs. traded unevenly steady; 750-1,000-lb. steers traded steady to $6 lower; and comparable heifer offerings traded unevenly steady. Benchmark steers averaging 740 lbs. sold between $168.25-178.25, and averaged $171.06.
New Mexico: Roswell Livestock in Roswell sold 1,035 head on Monday. Compared to the week prior, feeder steers, heifers and calves sold $4-8 higher. A small group of steers averaging 570 lbs. sold for $184.
South Dakota: Sioux Falls Regional Livestock in Worthing sold 3,625 head on Monday. Compared to the previous auction, feeder steers sold $5-9 higher, except 900-950 lbs. were $1-2 lower. Heifers sold $8-12 higher, except 950-1,000 lbs. were $4-5 lower. Benchmark steers averaging 773 lbs. sold between $152-162.50, averaging $157.30. — Charles Wallace, WLJ editor
