The cattle complex could not find any fundamental support, as the Federal Reserve hiked interest rates for the sixth time this year, and a disappointing export report weighed on the market. Cash trade developed on Thursday and was mainly steady in the North and South.
Live cattle lost support during the week, closing lower, with the December contract down $1.47 to $151.95 and the February contract down $1.98 to $154.87.
“Since last week’s flurry of trade, cattle futures this week have turned into a choppy, back and fill, uninspired trade,” Cassie Fish, market analyst for The Beef, wrote on Thursday. “Futures are not overly concerned with the long-term bullish fundamental outlook. Gigantic daily limits allow the market to move quickly when it needs to. Large commercial feedyards, with inventory committed to the large packers, simply manage basis and ignore the rest.”
Cash trade through Thursday was estimated to be 47,000 head. Live steers traded between $152-155, averaging $153.33, and dressed steers averaged $242.50. Cash trade was mostly steady, with trade in the South at $150 and trade in the North at $153. Some bids in Nebraska for dressed steers were $240, but asking prices were $244-245 in the North.
A total of 85,221 head sold during the last full week of October. Live steers averaged $152.69, and dressed steers sold for $240.
The national weekly direct beef type price distribution for the week of Oct. 17-24 was the following on a live basis:
• Negotiated purchases: $152.06.
• Formula net purchases: $150.22.
• Forward contract net purchases: $145.96.
• Negotiated grid net purchases: $150.41.
On a dressed basis:
• Negotiated purchases: $239.76.
• Formula net purchases: $238.02.
• Forward contract net purchases: $229.74.
• Negotiated grid net purchases: $233.19.
Slaughter through Thursday is projected to be 513,000 head, 1,000 head above the prior week. Slaughter volumes for this past week were 668,000 head—down 5,000 head from the previous week and even with the same week last year. Actual slaughter for the week ending Oct. 22 was 674,927 head. Steer dressed weights were 925 lbs.
“Thankfully, slaughter speeds and beef demand continue to support the market, but it’s this week’s cash cattle market that traders want to see trade,” ShayLe Stewart, DTN livestock analyst, wrote in Wednesday’s closing comments. “Packers are pulling cattle ahead in order to avoid participating in this week’s cash cattle market, but even so, it’s likely that they’ll have to show the market some support come Thursday, and with front-end supplies of cattle as thin as they are, higher prices are fully anticipated.”
Boxed beef prices were higher, with the Choice cutout up $2.69 to $265.18 and the Select cutout up $1.15 to $233.06.
USDA’s Weekly Export report for the Oct. 21-27 period showed net sales of 9,200 metric tons (mt), primarily for Japan (3,000 mt), South Korea (1,900 mt), Taiwan (1,800 mt) and Canada (1,100 mt). Exports were 18,000 mt, primarily to South Korea (5,200 mt), Japan (3,900 mt), China (2,800 mt), Mexico (1,700 mt) and Taiwan (1,300 mt).
Feeder cattle
Feeder cattle closed mostly sideways, with the November contract down 12 cents to $178 and the January contract down $1.03 to $179.42. The CME Feeder Cattle Index was up $2.85 to $177.63.
“The market continues to hover around its 40-day moving average, showing that traders are uncertain about the near future as well,” Stewart wrote on Thursday. “If the cash cattle market can show some support through higher cash sales and influence the live cattle contracts to trade higher, then feeders may contemplate trading higher but it likely won’t be done unless support from the live cattle arena seeps over into its market.”
Corn closed lower, with the December and March contracts each down 3 cents a bushel to $6.79 and $6.84, respectively.
Kansas: Winter Livestock in Dodge City sold 3,978 head Wednesday. Compared to the previous auction, feeder steers 400-950 lbs. sold $5-8 higher. Feeder heifers 400-875 lbs. sold $3-6 higher. Benchmark steers averaging 761 lbs. sold between $177-180 and averaged $179.44.
Missouri: Joplin Regional Stockyards in Carthage sold 5,500 head on Monday. Compared to a week earlier, in early trading, feeder steers and heifers sold $2-3 higher. A small group of benchmark steers averaging 720 lbs. sold for $177.
Nebraska: Bassett Livestock Auction in Bassett sold 2,345 head on Wednesday. There were limited comparable offerings compared to a week earlier, with 550 lb. steers trading $4 higher. There were no comparable offerings for heifers. A group of unweaned steers averaging 710 lbs. sold for $193.
New Mexico: Clovis Livestock Auction in Clovis sold 2,986 head Wednesday. Since there has not been an auction in the last few weeks, a comparison could not be established. A group of steers averaging 725 lbs. sold between $160-166, averaging $163.91.
Oklahoma: Oklahoma National Stockyards in Oklahoma City sold 6,500 head on Monday. Compared to a week earlier, feeder steers sold steady to $3 higher, but weights over 800 lbs. were not well tested. Feeder heifers sold steady to $2 lower. Steer calves sold $3-6 higher, and heifer calves under 500 lbs. sold unevenly steady, while those over 500 lbs. sold $2-4 higher. Benchmark steers averaging 763 lbs. sold between $175-179.50, averaging $178.40.
South Dakota: Hub City Livestock Auction in Aberdeen sold 4,304 head Wednesday. Compared to the last auction, the best test on yearling steers 900-950 lbs. sold steady, with other weight classes of yearling steers and heifers not well compared. A group of steers averaging 658 lbs. sold between $186-194.50, averaging $192.36. — Charles Wallace, WLJ editor
