Cattle futures took off, riding on the strength of higher cash trade. Feeder cattle did not seem to be affected by higher feed prices as traders were focused on cash strength and optimism over higher prices.
Live cattle futures closed higher over the week prior and closed at levels last seen in February. The April contract was up $3.43 to close at $144.10, and the June contract closed higher $3.48 to $139.90.
Cash trade developed early in the week, with about 112,000 head sold through Thursday. Trade in the South was $1 higher, and in the North, trade was $3-4 higher. Trade was between $140-147 for live cattle, averaging $145, and $223-238 for dressed cattle, averaging $234.
“There’s no doubt that packers were caught being short bought and that’s what drove prices higher,” said ShayLe Stewart, DTN livestock analyst, in the Wednesday midday comments. “Thankfully, feedlots were keen about their marketing this week and were able to see prices driven higher upon packers’ desperate need for more cattle.”
Cash trade through April 17 totaled 97,066 head. Live steers averaged $141.14, and dressed steers averaged $225.96.
The national weekly direct beef type price distribution for the week of April 11-18 was the following on a live basis:
• Negotiated purchases: $141.06.
• Formula net purchases: $141.30.
• Forward contract net purchases: $144.56.
• Negotiated grid net purchases: $140.25.
On a dressed basis:
• Negotiated purchases: $225.82.
• Formula net purchases: $223.08.
• Forward contract net purchases: $225.28.
• Negotiated grid net purchases: $224.23.
Slaughter through Thursday totaled about 483,000 head, well below the previous week’s pace. Total slaughter for the prior week is estimated to be 634,000 head, and beef production is estimated at 527.7 million lbs. Actual slaughter for the week ending April 9 was 664,924 head. Steer carcass weights were 912 lbs.
“The slaughter size this week will be important in keeping in check the size of processing margins with an effort of cattle owners to share in the overall margin available to beef producers and processors,” the Cattle Report wrote. “The period from now until Memorial Day will be a strong demand period for beef.”
USDA’s National Agricultural Statistics Service released the Livestock Slaughter 2021 Summary, showing beef production totaled 28 billion lbs., up 3 percent from the previous year. Commercial cattle slaughter during 2021 totaled 33.9 million head, up 3 percent from 2020, with federal inspection constituting 98 percent of the total. The average live weight was 1,371 lbs., down 2 lbs. from a year ago.
Boxed beef prices were lower, with the Choice cutout down $1.69 to close at $270.17 and the Select cutout down $4.03 to close at $255.68.
Feeder cattle
Despite corn futures trading higher, feeder cattle closed higher for the week. The April contract was up 25 cents to close at $158.45, and the May contract was higher $3.08, closing at $164.85.
The CME Feeder Cattle Index was down $2.05, closing at $153.90.
“Supplies of replacement cattle are dwindling at the same time corn prices are surging,” the Cattle Report wrote. “Surveys of feeder cattle in central Texas, Oklahoma and other regions usually supplying large quantities of replacement cattle to feedyards were reporting fewer cattle to market for May delivery. The irony is the short supply is finding higher prices despite corn prices that won’t stop going up. Empty pens in feedyards are creating strong demand for feeder cattle without close regard to grain prices.”
Corn traded above $8 a bushel and settled under $8 at the close on Thursday. The May contract was up 9 cents a bushel to $7.99, and the July contract was up 12 cents to close at $7.95.
Colorado: Winter Livestock in La Junta sold 756 head Tuesday. Compared to a week earlier, feeder steers and heifers under 700 lbs. were lightly tested, and over 700 lbs. sold in a light test but were mostly steady. Benchmark steers averaging 668 lbs. sold from $164-168, averaging $167.29.
Missouri: Joplin Regional Stockyards in Carthage sold 4,088 head Monday. Compared to the previous auction, feeder steers traded steady. Feeder heifers traded steady to $3 higher. Benchmark steers averaging 780 lbs. sold between $157-160.50 and averaged $158.82.
Nebraska: Tri-State Livestock in McCook sold 850 head Monday. Compared to the previous auction, steers over 700 lbs. were $2-3 higher. There were not enough cattle to compare in any other class. Benchmark steers averaging 725 lbs. sold for $168.
New Mexico: Clovis Livestock in Clovis sold 1,372 head Wednesday. There were not enough comparable sales for a market trend. Trade activity was light to moderate on moderate to good demand. Benchmark steers averaging 793 lbs. sold between $145.50-147.75 and averaged $147.64.
Oklahoma: Oklahoma National Stockyards in Oklahoma City sold 5,357 head Monday. Compared to the last auction, feeder steers sold $2-4 higher. Feeder heifers traded steady to $3 higher. Steer and heifer calves sold unevenly steady on a light test. Benchmark steers averaging 723 lbs. sold between $159-165.50, averaging $163.09.
South Dakota: Sioux Falls Regional Cattle Auction in Worthing sold 1,401 head Monday. Compared to a week prior, feeder steers and heifers sold with lower undertones. Benchmark steers averaging 783 lbs. sold between $154.25-160 and averaged $158.16.
Wyoming: Torrington Livestock in Torrington sold 1,518 head Wednesday. Compared to the last auction, steer calves traded unevenly steady, with instances of $2 lower on comparable trades to last week. Heifer calves under 650 lbs. traded unevenly steady, with instances of $2 lower. Heifer calves over 650 lbs. traded $2-3 higher. Benchmark steers averaging 762 lbs. sold for $161. — Charles Wallace, WLJ editor
