The cattle market turned itself around from a week earlier and charged higher. Futures made several-dollar gains on the board, and cash trade saw $1-2 increases over the week prior.
Live cattle futures found momentum on the board. The October contract gained about $3.50 to close at $185.40, and the December contract gained about $2.45 to close at $187.80.
Cash trade through Thursday totaled about 53,000 head and sold higher than a week earlier. Live steers sold from $183-186, and dressed steers sold from $290-293.
“Bottomline: cash fed cattle prices and live cattle futures prices have begun their seasonal Q4 rally,” Cassie Fish, market analyst, wrote Thursday in The Beef. “Boxed beef prices will eventually improve too, with the seasonal rib rally the primary driver.”
She added, “Questions remain as to whether a new cash cattle price will be reached, taking out $188.75 scored the first week of June.”
Cash trade through the week ending Oct. 8 totaled 94,461 head. Live steers averaged $182.72, and dressed steers averaged $289.52.
The national weekly direct beef type price distribution for the week of Oct. 2-9 was the following on a live basis:
• Negotiated purchases: $182.78.
• Formula net purchases: $187.63.
• Forward contract net purchases: $177.98.
• Negotiated grid net purchases: $187.38.
On a dressed basis:
• Negotiated purchases: $289.57.
• Formula net purchases: $295.51.
• Forward contract net purchases: $274.93.
• Negotiated grid net purchases: $295.09.
“Thursday’s WASDE report isn’t as supportive as cattle producers would have hoped,” wrote ShayLe Stewart, DTN livestock analyst, in her Thursday midday comments. “Regarding quarterly price projections, prices were slightly decreased from a month ago due to recent price trends.”
Slaughter through Thursday totaled about 499,000 head, on pace with a week earlier. Total slaughter for a week earlier is estimated at 628,000 head. Actual slaughter for the week ending Sept. 30 was 611,682 head. The average steer dressed weight was 920 lbs., 2 lbs. higher than the prior week.
“The question this week will be slaughter rates and box prices,” the Cattle Report wrote on Thursday. “There are indications a slaughter slowdown to 610,000 will trigger a response in the demand side while a weekly slaughter of 625,000 head will cause prices to move sideways. An unanswered question is whether 625,000 will keep the feedlot supplies current. To date there have been no dramatic increases in slaughter weights.”
Boxed beef prices were higher over the week. The Choice cutout gained over $3 to close at $301.19, and the Select cutout gained 25 cents to close at $275.02.
“Packer margins will remain red,” Fish said. “Grinds are under pressure, beef 50s made a new low for the year and beef 90s have fallen $17 off of their all-time high. The only two primals higher on the week are the rib and the chuck. The loin made a new low for the year a couple of weeks ago and keeps struggling.”
Feeder cattle
Feeder cattle futures also marched higher on the board. The October contract gained about $4.50 to close at $252.02, and the November contract gained about $3.30 to close at $253.57.
“It’s significant to see the spot November contract trading above its 100-day moving average as that’s been a threshold traders have struggled with as of late,” Stewart said. “But with the added support of stronger tones in the live cattle/cash cattle market and seeing corn prices weaker this morning—feeders are charging into Thursday’s noon hour.”
The CME Feeder Cattle index lost over a dollar to close at $250.30.
Corn futures traded sideways, with the December contract down a penny to $4.96 and the March contract down a penny to $5.11.
Kansas: Winter Livestock in Dodge City sold 3,160 head Wednesday. Compared to the last auction, feeder steers 700-1,000 lbs. sold $4-7 lower. Unweaned steer calves 400-700 lbs. sold $8-10 lower. Weaned and reputation steer calves 400-700 lbs. sold $8-10 higher. Feeder heifers 650-950 lbs. sold $2-5 lower. Unweaned heifer calves 400-650 lbs. sold $8-10 lower. Weaned and reputation heifer calves sold $8-10 higher. Benchmark steers averaging 756 lbs. sold between $245-253.50, averaging $248.40.
Missouri: Joplin Regional Stockyards in Carthage sold 4,000 head Monday. Compared to the last auction, feeder steers and heifers are selling $3-7 lower at the mid-session. Benchmark steers averaging 718 lbs. sold between $255-262.50, averaging $255.72.
Nebraska: Tri-State Livestock in McCook sold 2,890 head Monday. Compared to the last auction, steers under 450 lbs. sold $2-3 lower and 450-650 lbs. sold $10-20. Heifers under 600 lbs. traded $3-15 lower. There were not enough yearling sales for a comparison. A group of steers averaging 669 lbs. sold between $257-260, averaging $257.74.
New Mexico: Roswell Livestock Auction in Roswell sold 1,643 head on Wednesday. Compared to a week earlier, steer calves 300-400 lbs. were $2-5 lower and 400-600 lbs. sold sharply lower. Feeder steers 600-750 lbs. were steady to $3 higher with the exception of 650-700 lbs. selling $23 lower. Heifer calves 300-450 lbs. and 500-550 lbs. sold $16-20 higher while 450-500 lbs. were $9 lower and 550-600 lbs. sold $3 lower. Feeder heifers 600-650 were $4 lower. Trade was moderate on a lower market with larger numbers.
Oklahoma: Oklahoma National Stockyards in Oklahoma City sold 6,000 head Monday. Compared to the last auction, feeder cattle and calves were not well tested in early rounds at the mid-session. A weaker undertone was noted on unweaned calves. Benchmark steers averaging 702 lbs. sold between $250-263.50, averaging $262.04.
South Dakota: Ft. Pierre Livestock in Ft. Pierre sold 4,100 head on Friday. Compared to the previous auction, steers 800-999 lbs. were generally $2-6 lower. There were not enough numbers on the heifers to make a good comparison, but lower undertones would be noted. Benchmark steers averaging 726 lbs. sold for $262. — Anna Miller, WLJ managing editor
