Tuesday markets
Its turnaround Tuesday as weaker corn contracts gave the cattle complex an opportunity to rally.
Live cattle closed higher, with the August contract up 95 cents to $142.50 and the October contract up 92 cents to $143.82.
“CME cattle futures have resumed their uptrend today, bolstered by continuing bullish fundamental factors,” Cassie Fish, market analyst for The Beef, wrote. “After holding the 40-day moving average yesterday, the most active Oct. live cattle has returned quickly to its 10-day moving average today. Naysayers could call it a turnaround Tuesday up but given the very large throughput and declining quality grade, bullishness is no joke.”
Cash trade was light, with 5,368 head selling between $144-145. Dressed steers averaged $229.49. On the formula side, 24,100 head averaging 871 lbs. sold for $236.16.
“The cash cattle market hasn’t seen any interest develop yet this week and guessing what tactic packers are going to use in approaching this week’s market is a gamble,” ShayLe Stewart, DTN livestock analyst, wrote in the midday comments.
“Packers could opt to sit back and work the cash cattle market $1-2 lower again this week, which would help drive cash cattle prices lower for the time being, but it will hurt their inventory,” Stewart continued. “Packers could also show modest interest in this week’s cash cattle market and try to hold the market mostly steady but largely focus on buying as many cattle as possible to alleviate their needs of supporting the market in the weeks to come. Either way, feedlots are going to have a tough time marketing cattle this week as packers use the nearing Labor Day holiday and the lighter kill schedule that it will possess to their advantage.”
The national weekly direct beef type price distribution for the week of August 22-29 was the following on a live basis:
• Negotiated purchases: $144.81.
• Formula net purchases: $146.22.
• Forward contract net purchases: $145.32.
• Negotiated grid net purchases: $143.92.
On a dressed basis:
• Negotiated purchases: $232.81.
• Formula net purchases: $230.63.
• Forward contract net purchases: $217.79.
• Negotiated grid net purchases: $229.76.
Slaughter is projected to be 126,000 head, the same as last week.
Boxed beef prices were sharply lower on 162 loads, with the Choice cutout down $3.25 to $259.79 and the Select cutout down $3.07 to $239.68.
Feeder cattle
Feeder cattle closed triple digits higher, with the September contract up $2.25 and the October contract up $2.20 to $183.27. The CME Feeder Cattle Index was down 16 cents to $183.
“Unfortunately, the cattle complex is still subject to more pressure if the corn market possesses much more upside even though supplies are thin compared to a year ago and strong fundamental factors are still pointing to higher prices later this year and well into 2023,” Stewart said.
Corn contracts closed lower after Monday’s rally, with the September contract down 4 cents to $6.79 and the December contract down 5 cents to $6.77.
Missouri: Joplin Regional Stockyards in Carthage sold 5,092 head Monday. Compared to the last auction, feeder steers under 525 lbs. traded $5-12 higher, with heavier weights trading steady to $3 higher. Feeder heifers under 550 lbs. traded steady to $4 higher, with heavier weights trading steady. Benchmark steers averaging 722 lbs. sold between $184-196, averaging $191.20.
Nebraska: Tri-State Livestock in McCook sold 3,520 head Monday. Compared to the previous auction, steers were steady to $6 higher. Heifers were $10-20 lower, except 500 lbs., which were $7 higher. A group of steers averaging 846 lbs. sold for $180.50. — Charles Wallace, WLJ editor
