Despite a summer slowdown in beef demand, cattle feeders found leverage over the week, finding encouragement from the board and holding out against packers.
Live cattle futures climbed several dollars over the week. The August contract gained $4.63 to close at $188.90, and the October contract gained about $3 to close at $188.60.
Cash trade through Thursday was about 11,000 head. Live steers sold from $187-196, and dressed steers averaged $308.
“Negotiated fed cattle prices have dropped the last couple of weeks but this week looks like a steady go at worst,” wrote Cassie Fish, market analyst, in The Beef on Wednesday. “Just a few thousand cattle have traded at steady money, but steady bids have been passed as cattle feeders price cattle higher.”
Fish continued that a modest futures rally was all the encouragement feeders needed to wait packers out. “Cattle feeders are enjoying having the stick,” she added.
Cash trade for the week ending July 21 totaled 71,749 head. Live steers averaged $193.95, and dressed steers averaged $310.21.
The national weekly direct beef type price distribution for the week of July 15-22 was the following on a live basis:
• Negotiated purchases: $193.75.
• Formula net purchases: $195.40.
• Forward contract net purchases: $192.96.
• Negotiated grid net purchases: $196.71.
On a dressed basis:
• Negotiated purchases: $310.22.
• Formula net purchases: $309.49.
• Forward contract net purchases: $297.29.
• Negotiated grid net purchases: $314.42.
Slaughter through Thursday totaled about 480,000 head. Total slaughter for a week earlier is projected at 584,000 head. Actual slaughter for the week ending July 13 totaled 604,573 head. The average steer dressed weight was 915 lbs.
“This week’s slaughter is not expected to make up for the cuts as it is estimated at 600k head, again the lowest since 2016,” Fish said.
Boxed beef prices dropped several dollars lower. The Choice cutout lost about $6 to close at $312.46, and the Select cutout lost about $3 to close at $295.11.
“Slower summer demand for beef will be tested again this week as packers struggle with short supplies of fed cattle and struggle even more trying to get paid more money for the boxes,” the Cattle Report wrote. “The dynamic price action this creates will set the stage for packers to hold a governor on slaughter volumes in an attempt to jump start the box prices.”
ShayLe Stewart, DTN livestock analyst, added in her Wednesday closing comments that boxed beef prices may have seen their peak for this summer.
Feeder cattle
Feeder cattle futures sold mostly steady over the week. The August contract gained 7 cents to close at $258.62, and the September contract lost $1.56 to close at $257.90.
“With midday boxed beef prices higher, all the live cattle contracts higher and with buyer demand still incredibly strong in the countryside—traders feel supported enough to now have advanced the spot August contract back above the market’s 100- and 40-day moving average,” wrote Todd Hultman, DTN lead analyst, in his Thursday midday comments.
The CME Feeder Cattle Index lost $2.26 to close at $259.06.
Corn futures saw some modest gains, with the September contract up 8 cents to $4.06 and the December contract up 9 cents to $4.20.
Kansas: Winter Livestock in Dodge City sold 247 head on Wednesday. Feeder steers 450-550 lbs. sold steady. Heifers under 750 lbs. were not well tested, but over 750 lbs. sold $7 lower. Benchmark steers averaging 768 lbs. sold from $239-268, averaging $261.59.
Missouri: Joplin Regional Stockyards in Carthage sold 5,321 head on Monday. Compared to a week earlier, feeder steers under 800 lbs. sold from $8-20 higher. Steers over 800 lbs. sold steady to $3 higher. Feeder heifers sold mostly $3-10 higher with light five-weight heifers up to $20 higher. Benchmark steers averaging 769 lbs. sold from $261-278, averaging $270.08.
Nebraska: Bassett Livestock Auction sold 3,150 head on Wednesday. Compared to two weeks earlier, there was a limited number of comparable offerings. Steers 600-750 lbs. and 1,000-1,050 lbs. sold unevenly steady, and steers 900 lbs. traded steady. Heifers 600 lbs. traded steady. Benchmark steers averaging 758 lbs. sold from $288.50-301, averaging $295.77.
Oklahoma: Oklahoma National Stockyards in Oklahoma City sold 4,000 head on Monday. Compared to a week earlier, steers and heifers sold steady to $4 higher. Benchmark steers averaging 767 lbs. sold from $258.50-269, averaging $263.64.
South Dakota: Sioux Falls Regional Cattle Auction in Worthing sold 1,769 head on Monday. Compared to a week earlier, 950-lb. steers sold mostly steady. Heifers 750 lbs. sold $6 higher and 800-850-lb. heifers sold mostly $1-6 lower.
Wyoming: Torrington Livestock in Torrington sold 1,146 head on Wednesday. Compared to a week earlier, feeder steers and heifers traded $1-3 lower. Benchmark steers averaging 740 lbs. sold from $275-281, averaging $277.64. — Anna Miller, WLJ managing editor
