It was a bear market this past week, as what cash trade did take place was lower. Packers were not in the market due to buying cattle for deferred delivery a week earlier. Consequently, cattle futures were lower and boxed beef closed lower.
Live cattle futures closed lower, with the February contract down $1.60 to $155.95 and the April contract down $1.80 to $159.12.
“The spot April contract is holding above the 100-day moving average, but it’s anyone’s guess at this point if the market will still be able to hold that threshold at closing,” ShayLe Stewart, DTN livestock analyst, wrote in Thursday’s midday comments. “The cash cattle market hasn’t seen much interest develop but there are a few bids on the table.”
As was the case a week earlier, cash trade did not develop with 19,500 head sold. Live steers sold between $153-157, averaging $154.35. Dressed steers sold for $248.
Some dressed sales were reported in Nebraska at $249, $2 lower than a week earlier’s weighted average. Asking prices in the South are noted at $158-plus, but packers are offering $154 in Kansas.
Cash trade for the week ending Jan. 15 was about 78,000 head. Live steers averaged $156.92, and dressed steers averaged $251.30.
“It’s a kick in the teeth to see that 29% of last week’s negotiated cash cattle trade was committed for the deferred delivery option, as that pads packers’ inventory and minimizes their need to support the market both this week and moving forward,” Stewart said wrote on Tuesday.
The national weekly direct beef type price distribution for the week of Jan. 9-16 was the following on a live basis:
• Negotiated purchases: $156.99.
• Formula net purchases: $159.48.
• Forward contract net purchases: $163.70.
• Negotiated grid net purchases: $161.91.
On a dressed basis:
• Negotiated purchases: $251.42.
• Formula net purchases: $256.05.
• Forward contract net purchases: $247.07.
• Negotiated grid net purchases: $255.11.
Slaughter through Thursday is expected to be 493,000 head, 12,000 head below the previous week. Actual slaughter for the week ending Jan. 7 was 564,658 head (steers 46.8%, heifers 29%). The average steer dressed weight was 919 lbs.
Boxed beef prices were lower, with the Choice cutout down $5.98 to $271.51 and the Select cutout down $1.32 to $255.69.
“February historically is a weak seasonal price period for the cutout and a negative period for packer margins,” Cassie Fish, market analyst for The Beef, wrote on Tuesday. “This year, the packer is set up with black margins and strong consumer beef demand. Carcass weights are lighter than a year ago and, given the winter weather in Nebraska, will stay that way.”
Feeder cattle
Feeder cattle futures closed lower, with the January contract down $4.02 to $178.10 and the March contract down $4.17 to $180.10. The CME Feeder Cattle Index was lower $4.49 to $177.87.
“The spot March contract has sunk below both the 100-day and 40-day moving averages and isn’t far from testing support levels,” Stewart wrote on Tuesday.
Corn contracts closed higher, with the March contract up 6 cents to $6.77, and the May contract up 5 cents to $6.74.
Colorado: Winter Livestock in La Junta sold 4,739 head Tuesday. Compared to the previous auction, steers sold unevenly, with under 550 lbs. steady to $2 higher, 550-700 lbs. were $3-5 lower and over 700 lbs. traded steady to $2 higher. Heifers 300-400 lbs. sold $5 lower, 400-600 lbs. were steady to $3 higher and over 600 lbs. steady to $3 lower. Benchmark steers averaging 716 lbs. sold between $174.50-179.60 and averaged $176.75.
Kansas: Winter Livestock in Dodge City sold 3,088 head Wednesday. Compared to the previous auction, feeder steers 700-950 lbs. sold steadily to $3 lower, and 575-700 lbs. sold $5-7 higher. Steer calves 400-575 lbs. sold steady to $3 lower. Heifers 400-900 lbs. sold steady to $3 lower. Benchmark steers averaging 765 lbs. sold between $171.50-182.50, averaging $182.07.
Iowa: Russell Livestock in Russell sold 4,600 head Monday. Compared to the previous auction, steers 500-750 lbs. sold $1-6 higher. Heifers 450-700 lbs. sold steady to $5 higher. Benchmark steers averaging 727 lbs. sold between $176-186, averaging $181.70.
Missouri: Joplin Regional Stockyards in Carthage sold 10,000 head Monday. Compared to the previous auction and in early trading, feeder steers sold steady to $3 lower, and feeder heifers were steady. Benchmark steers averaging 762 lbs. sold between $176-182.50 and averaged $179.34.
Oklahoma: Oklahoma National Stockyards in Oklahoma City sold 15,000 head Monday. Compared to the last auction, feeder steers and heifers were too lightly tested in early rounds for a true test. Steer calves under 500 lbs. sold $1-4 lower, and over 500 lbs. were steady to $3 higher. Heifer calves sold $5-8 lower. Benchmark steers averaging 778 lbs. sold for $177.50.
South Dakota: Sioux Falls Regional Cattle Auction in Worthing sold 7,907 head Monday. Compared to the last auction, feeder steers sold $1-5 lower, except 600-700 lbs. and 850-950 lbs. were steady to $3 higher. Feeder heifers sold $1-4 higher, except 600-650 lbs., 700-750 lbs. and 800-900 lbs. were steady to $2 lower. Benchmark steers averaging 771 lbs. sold between $171-183.75 and averaged $179.16.
Wyoming: Winter Livestock in Riverton sold 4,491 head Tuesday. Compared to the last auction, feeder steers sold steady to $2-4 lower, 650-695 lbs. steers sold $7-9 lower, heifer calves traded steady to $2-5 lower and 600 lbs. heifers were $7 lower. Benchmark steers averaging 720 lbs. sold between $173.25-185 and averaged $179.46. — Charles Wallace, WLJ editor
