Tuesday markets
Feeder cattle closed lower as the corn market closed up double digits on speculation that this year’s crop will be lower since the Pro Farmer Crop Tour shows drought damage and spotty yields.
Live cattle closed higher, with the August contract up 40 cents to $141.62 and the October contract up 10 cents to $144.60.
Cash trade was somewhat active, with 13,419 head selling between $142-148, averaging $145.13. Dressed steers averaged $232.84. Trade was mainly in Kansas and Texas, at $142, with a few instances of $142.50. In the western Corn Belt, a few live purchases traded at $148.
On the formula side, 24,700 head averaging 855 lbs. sold for $232.36.
The national weekly direct beef type price distribution for the week of August 15-22 was the following on a live basis:
• Negotiated purchases: $146.70.
• Formula net purchases: $144.43.
• Forward contract net purchases: $142.66.
• Negotiated grid net purchases: $142.25.
On a dressed basis:
• Negotiated purchases: $234.13.
• Formula net purchases: $226.61.
• Forward contract net purchases: $219.48.
• Negotiated grid net purchases: $226.01.
Slaughter for the day is projected to be 125,000 head, 4,000 higher than last week.
“Slaughter volumes for this past week were 661,000, up from 647,000 the previous week but down from 666,000 last year,” wrote the Ag Center in the Cattle Report. “This is the first weekly decline from the prior year in many weeks. The heavy rains across much of the southwest and southern plains will be a game changer. The timely rains will create winter grazing opportunities as well as slow feedyard placements and cow culling. As we move toward fall, fewer cows will be included in the slaughter mix requiring more fed cattle to furnish the tonnage necessary for current beef demand. Pulling more fed cattle from the available slaughter pool may hold carcass weights from seasonal increases into fall months.”
USDA’s Agricultural Marketing Service released the National Weekly Fed Cattle Comprehensive report, showing quality grading at 79.9 percent and dressed weights higher to 874.6 lbs.
Boxed beef prices closed mixed on 152 loads, with the Choice cutout down $1.72 to $262.80 and the Select cutout up 44 cents to $238.80.
USDA released the Cold Storage report after the market closed yesterday. The total supply of beef in cold storage at the end of July was 510.8 million lbs., 27.4 percent higher than a year ago and 15.5 percent higher than the five-year average.
The Daily Livestock Report noted a 13 percent jump in the inventory of beef cuts and said it is unusual to see an increase in July.
“We suspect some of this may have to do with an improvement in export demand (more product needs to be staged before it ships out) as well as end users finding attractive prices for some items and looking to build inventory for later in the year,” the Daily Livestock Report wrote. “However, this does increase the downside price risk for beef cuts should demand slow down after Labor Day, limiting how much extra product can go into the freezer.”
Feeder cattle
Feeder cattle closed lower, with the August contract down 50 cents to $180.90 and the September contract down $1.90 to $182.45. The CME Feeder Cattle Index was down 6 cents to $180.60.
“It’s a tough day for the feeder cattle complex because not only are corn prices trading higher, but so are all the other grain markets, and by trading higher, I mean flat soaring into Tuesday’s afternoon,” ShayLe Stewart, DTN livestock analyst, wrote in the midday comments. “The grain market began to soar higher as falling crop ratings and the belief that yields are continuing to erode has everyone questioning what exactly this year’s crop will amount to.”
The Pro Farmer Crop Tour is underway, with day 1 yield estimates for corn being 118.45 bushels per acre in South Dakota and 174.17 bushels per acre in Ohio, well below 2021 levels. Today, scouts are heading to Nebraska and Indiana.
Corn contracts closed double digits higher, with the September and December contracts up 26 cents to $6.60 and $6.55, respectively.
Dana Mantini, DTN’s senior market analyst, said, “Corn conditions fell to the second lowest rating since 2012, and findings so far from the Midwest crop tour seem to find more problems related to drought in the central and western Corn Belt. New crop corn and soy futures have both moved above the closely watched 50-day moving average.”
Nebraska: Tri-State Livestock in McCook sold 2,820 head Monday. Compared to the previous auction, steers and heifers were both $4-20 higher. A group of steers averaging 565 lbs. sold between $207-210, averaging $208.51.
New Mexico: Roswell Livestock in Roswell sold 913 head Monday. Compared to last week, steer and heifer calves sold $10-15 higher on comparable weights. Feeder steers and heifers have no accurate comparison. A group of steers averaging 621 lbs. sold between $170-180 and averaged $171.75.
South Dakota: Sioux Falls Regional Livestock in Worthing sold 2,622 head Monday. Compared to the last auction, feeder steers were steady to $3 higher, except 800-850 lbs., which sold with lower undertones. Feeder heifers sold with lower undertones, except 700-750 lbs. and 800-900 lbs., which were steady to $3 higher. Benchmark steers averaging 736 lbs. sold between $193-204, averaging $195.48. — Charles Wallace, WLJ editor
