Tuesday markets
The market is fixated on seeing what happens between the U.S. and China as Nancy Pelosi visits Taiwan. Live cattle were down, as cash trade was very light with packers taking a back seat, and feeder cattle were down triple digits despite lower corn futures.
Live cattle closed slightly lower, with the August contract down 20 cents to $136.57 and the October contract down 50 cents to $142.12.
Cash trade was light, with 2,741 head selling for $143.
“Asking prices are starting out at $137 in the South, and the North has yet to disclose what they’d like to see,” ShayLe Stewart, DTN livestock analyst, wrote in the midday comments. “It’s unlikely that any cash cattle trade begins until Wednesday as packers look to see what develops in the China-U.S. situation; any negative developments will give them more reason to slash cash prices.”
On the formula side, 28,700 head averaging 876 lbs. sold for $226.51.
Today’s Fed Cattle Exchange auction reported a total of 1,364 head, which went unsold since they did not meet the asking prices of mostly $136-139.
The national weekly direct beef type price distribution for the week of July 18-25 was the following on a live basis:
• Negotiated purchases: $140.16.
• Formula net purchases: $143.42.
• Forward contract net purchases: $145.86.
• Negotiated grid net purchases: $141.14.
On a dressed basis:
• Negotiated purchases: $225.49.
• Formula net purchases: $225.47.
• Forward contract net purchases: $220.33.
• Negotiated grid net purchases: $230.79.
Slaughter for today is projected to be 124,000 head, 1,000 head below last week.
“This week’s estimated F.I. slaughter is 665k to 670k on the heels of several 665k or higher slaughters since Memorial Day,” Cassie Fish, market analyst for The Beef, wrote. “Yes, the industry is slaughtering a lot of cows, but the fed slaughter pace is elevated enough to contribute to increasing currentness. Only one of the last seven non-holiday slaughter weeks was under 665k.”
USDA’s Agricultural Marketing Service released the National Weekly Fed Cattle Comprehensive report, showing quality grading at 80.1 percent and dressed weights higher to 867.1 lbs.
Boxed beef prices were lower on 157 loads, with the Choice cutout down $2.14 to $268.46 and the Choice cutout down $1.35 to $241.55.
According to the Daily Livestock Report, the Choice/Select spread has been over $25 for the last five weeks and above $20 for nine weeks. Choice boxed beef has been relatively flat in the last few months, trading between $255-275. Select boxed beef, on the other hand, has been declining in value over the better part of the year, trading between $240-250.
“At least some of the change in Select boxed beef values can be attributed to larger supplies of select beef moving through the system,” the Daily Livestock Report wrote. “In the first quarter of 2022, Select (carcasses) made up under 14 percent. Since mid-April, that number has risen to over 16 percent fairly consistently over June and July.”
Feeder cattle
Feeder cattle were sharply lower, taking back yesterday’s gains, with the August contract down $1.52 to $178.12 and the September contract down $1.65 to $181.45. The CME Feeder Cattle Index was down 34 cents to $174.40.
“Unfortunately, without any support stemming from the live cattle complex, it’s unlikely that the market will be able to close higher even as corn trades lower and as feeder continue to bring more money in sales throughout the countryside, as the market seems fixated on one thing and one thing only—what’s China going to do next?” Stewart wrote.
Corn closed lower, with the September and December contracts down 15 cents a bushel to $5.91 and $5.94, respectively.
Nebraska: Tri-State Livestock in McCook sold 2,029 head Monday. Compared to the previous auction, there were not enough feeder cattle for a market test. Bawling steer and heifer calves sold unevenly steady. Benchmark steers averaging 757 lbs. sold for $182.
South Dakota: Sioux Falls Regional Cattle Auction in Worthing sold 2,694 head Monday. Compared to the last auction, feeder steers under 1,000 lbs. sold with steady to lower undertones, and over 1,000 lbs. traded $2-6 lower. Feeder heifers 600-650 lbs. and 850-900 lbs. sold steady to $2 lower, and other weights sold with steady to lower undertones. Benchmark steers averaging 773 lbs. sold between $182-189.50, averaging $185.79. — Charles Wallace, WLJ editor
