The cattle market was uneventful during the Christmas holiday-shortened week, with futures steady on the board and cash trade light—albeit a little higher than a week earlier.
Live cattle futures traded mostly sideways over the week. The December contract gained 65 cents to close at $171.20, and the February contract gained 25 cents to close at $168.92.
“Once again, very limited activity in all markets during the holiday week, and what trade did show up this week is more focused on the movements in the stock market which is at or near record highs, leaving little attention to livestock trade,” DTN wrote in its Thursday midday comments. “Even cash and meat market movement have very little impact on the direction of futures trade going into the end of the year.”
Cash trade through Thursday was slow to get started, with the bulk of trade taking place on Thursday morning. Total cash trade through Thursday was less than 15,000 head. Live steers sold from $170-172.50, and dressed steers sold from $270-272.
“The negotiated fed cattle market, on the other hand, is trading now in Texas at $172, $1 higher than last week, the highest since the week ended December 1, that averaged $174.45,” wrote Cassie Fish, market analyst, in The Beef on Thursday. “Higher cash money this week was anticipated and highly probable.”
Cash trade for the week ending Dec. 24 totaled 55,788 head. Live steers averaged $170.41, and dressed steers averaged $270.45.
The national weekly direct beef type price distribution for the week of Dec. 18-25 was the following on a live basis:
• Negotiated purchases: $170.62.
• Formula net purchases: $172.70.
• Forward contract net purchases: $181.99.
• Negotiated grid net purchases: $175.83.
On a dressed basis:
• Negotiated purchases: $270.37.
• Formula net purchases: $275.17.
• Forward contract net purchases: $284.47
• Negotiated grid net purchases: $281.08
“The slaughter at 621,000 head this past week was 28,000 smaller than the previous week but exceeded the early forecast and held beef prices firm,” the Cattle Report wrote on Thursday. “The number exceeded last year by 69,000 head. Slaughter volumes for December will exceed last December.”
Slaughter through Thursday totaled 350,000 head due to the holiday-shortened week. Total slaughter for a week earlier is estimated at 621,000 head. Actual slaughter for the week ending Dec. 16 was 647,172 head. The average dressed steer weight was 941 lbs., 2 lbs. above the prior week.
“Carcass weights ‘should’ be topping and typically would have by now,” Fish said. “No doubt the slow slaughter pace the majority of the time since April has destroyed front-end currentness and taken the edge off of upside potential for fed cattle prices.”
She added, “Not to say cash cattle prices won’t rally in Q1, it’s highly probable they will, but the upside is and will be limited because of the lack of currentness.
Boxed beef prices were steady with a week earlier. The Choice cutout gained 15 cents to close at $291.13, and the Select cutout lost about $2 to close at $259.24.
Feeder cattle
Feeder cattle futures also traded mostly steady over the week. The January contract gained 77 cents to close at $222.47, and the March contract lost 25 cents to close at $223.12.
“Limited volume is seen across the complex, allowing for markets to move in a more volatile and wide trading range, with little to no fundamental indications at this point,” DTN said.
The CME Feeder Cattle Index lost about $2 to close at $219.80.
Corn futures also traded sideways, with the March contract up two pennies to $4.74 and the May contract up a penny to $4.86.
“Many traders look for the basis to fall following year end as farmers turn loose of stored grain,” the Cattle Report said. “Business has generally been good on the farm the past few years and farmers are inclined to push sales into next year hoping to avoid paying taxes on this year’s income.”
New Mexico: Roswell Livestock Auction in Roswell sold 1,192 head on Tuesday. Compared to a week earlier, steer calves 300-400 lbs. were $5-7 lower and 400-600 lbs. sold $12-20 higher. Feeder steers 600-700 lbs. sold $1-3 higher. Heifer calves 300-350 lbs. were $29 lower while 300-400 lbs. sold $5 lower and 400-450 lbs. sold $10 higher. Heifers 450-500 lbs. were $14 lower, and 500-600 lbs. sold $7-21 higher. Feeder heifers 650-700 lbs. were $8 higher. A small group of benchmark steers averaging 714 lbs. sold from $183-190, averaging $186.15. — Anna Miller, WLJ managing editor
