Tuesday markets
“It’s a bleak day for the live cattle market as the cash cattle market is seeing more cattle trade at steady money and the likelihood of seeing higher prices grows thinner and thinner,” ShayLe Stewart, DTN livestock analyst, wrote in the midday comments.
Live cattle closed the day lower, with the April contract down $1.20 to $136.80 and the June contract down $1.60 to $133.32. Deferred contracts also had triple-digit losses.
“The refusal of the cattle industry to adopt cash settlement for the live cattle contract assures no speculative long positions will be initiated in the delivery month,” the Cattle Report wrote. “This obvious flaw creates a contract structure with a bias to the short side and this is supported by the large commercial hedgers. They fail to realize the liquidity they deny the contract costs the entire industry a few ticks at a time.”
Cash trade was active today, with 28,123 head selling between $137-140, averaging $139.15. Dressed steers sold between $219-222.50 and averaged $221.90. On the formula side, 16,100 head averaging 857 lbs. sold for $221.75.
The national weekly direct beef type price distribution for the week of March 28 to April 4 was the following on a live basis:
• Negotiated purchases: $139.50.
• Formula net purchases: $141.76.
• Forward contract net purchases: $146.03.
• Negotiated grid net purchases: $140.14.
On a dressed basis:
• Negotiated purchases: $222.46.
• Formula net purchases: $222.72.
• Forward contract net purchases: $221.98.
• Negotiated grid net purchases: $223.09.
Boxed beef prices were higher on 123 loads, with the Choice cutout up $3.49 to $271.53 and the Select cutout up $1.20 to $262.90.
Slaughter for the day is projected to be 125,000 head, the same as last week.
“The beef processing industry has been unable to recover the daily throughput levels seen in 2019 on a consistent basis,” Cassie Fish, market analyst for The Beef, wrote. “And it is the consistency that is the key and what will be required over a 10-12 week period beginning in May. There have only been two weeks in 2022 when fed slaughter exceeded a year ago, albeit supply is tighter than a year ago for the same time frame.”
USDA’s Agricultural Marketing Service released the National Weekly Fed Cattle Comprehensive report, showing quality grading at 83.6 percent and dressed weights lower to 874.9 lbs.
Feeder cattle
Feeder cattle were lower as corn closed higher. The April contract was down $2.25 to $156.12, and the May contract was down $3.47 to $159. The CME Feeder Cattle Index was down 39 cents to $155.76.
“With the live cattle market adding little to no support to the overall cattle sector, the feeder cattle contracts are clinging to the influence of the grain complex and will likely continue to venture lower throughout the day as the live cattle complex comes up against tough pushback from packers and their ability to manage supplies keeps the cash cattle market depressed,” Stewart said.
Corn contracts were higher after a record corn export report of 6.62 million metric tons in February. The May and July contracts were up 9 cents a bushel to $7.59 and $7.48, respectively.
Nebraska: Tri-State Livestock in McCook sold 1,340 head Monday. Compared to the last auction, weights over 850 lbs. were steady to $3 higher on good demand. Otherwise, there were not enough sales to show any other comparisons. Benchmark steers averaging 780 lbs. sold between $150.50-158 and averaged $156.46.
New Mexico: Roswell Livestock in Roswell sold 904 head Monday. Compared to the previous auction, steer calves and feeders under 500 lbs. sold $3 lower, 500-700 lbs. were mostly $5 lower and a few over 700 lbs. traded $1 higher. Heifer calves and feeders under 500 lbs. sold $3-6 higher, over 500 lbs. were $3 lower and a few over 600 lbs. traded $10 lower. A group of steers averaging 736 lbs. sold for $148.50. — Charles Wallace, WLJ editor
