Following the Memorial Day weekend, the cattle market shot higher. Although cash trade was slow to get started, thanks to the holiday-shortened week, bites were expected later in the week.
Live cattle prices scaled higher, with the June contract up nearly $7 to $174.90 and the August contract up nearly $8 to $172.37.
Cash trade through Thursday totaled about 45,000 head. Live steers sold from $174.50-188, averaging $180.24. Dressed steers sold from $285-292.50, averaging $289.21.
“Negotiated fed cattle prices in Texas and Kansas have traded $9/cwt higher than last week at $180, making a new all-time high in the region,” wrote Cassie Fish, market analyst, in The Beef on Thursday. “The south has been the markets’ weak link and CME live cattle futures have traded discount to cash in the south. North, cattle feeders are passing $187 bids. These prices are all-time highs.”
Cash trade through the week ending May 28 was 99,646 head. Live steers averaged $178.22, and dressed steers averaged $284.43.
“As packers have been forced to compete for continued tight market-ready fed cattle supplies, prices have escalated,” Fish said. “Beef demand is solid; sales last week were brisk and the only way to supply demand is by covering slaughter schedules. The packer has held leverage for years. Not anymore.”
The national weekly direct beef type price distribution for the week of May 22-29 was the following on a live basis:
• Negotiated purchases: $177.91.
• Formula net purchases: $176.03.
• Forward contract net purchases: $172.47.
• Negotiated grid net purchases: $174.59.
On a dressed basis:
• Negotiated purchases: $284.82.
• Formula net purchases: $279.02.
• Forward contract net purchases: $265.23.
• Negotiated grid net purchases: $284.06.
Slaughter through Thursday was estimated at 382,000 head, down a whole day of slaughter due to the Memorial Day holiday. Projected slaughter for a week earlier is estimated at 625,000 head. Actual slaughter for the week ending May 20 was 640,266 head. The average dressed steer weight was 885 lbs., down 6 lbs. from the prior week.
Boxed beef prices were higher, with the Choice cutout up about $5 to $306.44 and the Select cutout up about $2 to $286.32.
“Cattle feeders have endured four years of challenges, foremost the struggle to get fed cattle harvested in a timely manner,” Fish said. “The outlook for the next 18 to 24 months is one of tight fed cattle supplies, and high cattle prices but to the cattle producer, it’s been a very long time coming.”
Feeder cattle
Feeder cattle contracts traded mixed. The August contract lost about 70 cents to close at $233.92, and the September contract gained about a dollar to close at $237.10.
The CME Feeder Cattle Index was modestly lower, down 7 cents to $208.07.
“It’s likely that when cash cattle trade does develop this week that it will be steady to somewhat higher, which should help add even more support to feeders,” wrote ShayLe Stewart, DTN livestock analyst, in her Thursday midday comments.
Corn futures traded steady to higher, with the July contract up 2 cents to $5.92 and the September contract up 14 cents to $5.24.
Kansas: Winter Livestock in Dodge City sold 1,458 head on Wednesday. Feeder steers 750-950 lbs. sold $10-12 higher. Feeder heifers 600-900 lbs. sold $10-12 higher. Benchmark steers averaging 793 lbs. fold from $203-213, averaging $210.56.
Nebraska: Huss Livestock in Kearney sold 2,639 head Wednesday. Compared to the last auction, steers under 600 lbs. sold $10-15 higher, and all weights of heifers sold $2-10 higher. Benchmark steers averaging 779 lbs. sold between $227.25-232 and averaged $227.75.
New Mexico: Roswell Livestock Auction in Roswell sold 840 head on Wednesday. Compared to the prior sale, steer calves 350-400 lbs. sold $7 higher, 400-450 lbs. sold $6 higher, 450-500 lbs. sold $7 higher and 500-550 lbs. held steady. Steers 550-600 lbs. were $7 higher. Feeder steers 600-650 lbs. sold $14 higher, and 650-700 lbs. were steady. Heifer calves 350-400 lbs. sold $2 higher while 400-500 lbs. were $10 higher. Heifers 500-550 lbs. were $2 higher while 550-600 lbs. sold $12 higher.
Oklahoma: OKC West in El Reno sold 6,055 head Wednesday. Compared to the previous auction, feeder steers and heifers traded $5-8 higher. Steer and heifer calves traded $3-8 higher on limited comparable offerings. Benchmark steers averaging 777 lbs. sold between $212-222, averaging $217.46. — Anna Miller, WLJ managing editor
