Wednesday markets
Despite the surge in boxed beef prices, traders were backing away from Tuesday’s gains.
Live cattle closed lower, with the August contract down 70 cents to $122.95 and the October contract down 55 cents, closing at $127.57.
Cash trade was active today, with 21,487 head selling between $119-126, averaging $122.43. Dressed steers sold between $198-204, averaging $199.61. On the formula side, a total of 11,700 head averaging 854 lbs. sold for $204.04.
“There is little active negotiations occurring as packers allow cattle owners to sit on sharply higher asking prices hoping time will dim hopes for sharply higher prices and make meager gains more palatable later in the week,” The Cattle Report wrote. “A small group of cattle brought up to $127 in Iowa and nothing else was reported. A very small volume of sales on the Wednesday online auction was in Texas at $120-$120.50—$1 higher than last week’s offerings.”
The Fed Cattle Exchange listed 4,872 head from Texas and Kansas for its weekly auction. Of the total, 590 head sold (229 heifers, 152 steers) from Texas with the weighted average sales price of $120.50 for heifers and steers, and 4,282 head were listed as unsold as they did not meet the reserve prices that ranged from $122-124. Opening prices ranged from $120, high bids ranged from $120-121.75. The Fed Cattle Exchange will hold a special sale on Thursday, Aug. 12, at 10 a.m., CDT.
Slaughter for today is expected to be 120,000 head—a thousand below last week. Monday’s slaughter was revised downward by 5,000 head. Slaughter so far this week is estimated to be 350,000 head—9,000 head below last week.
“Challenges with this week’s throughput at plants—whether labor or actual weather, are expected to keep this week’s slaughter sub-650k, possibly close or sub-640k,” Cassie Fish, livestock analyst for The Beef, wrote. “Packers have not been aggressive at all this week and don’t seem to need much new inventory. This is keeping a lid on cash cattle prices when many were hopeful some upward momentum might be building.”
Boxed beef prices climbed again today on 110 loads, with the Choice cutout up $5.48 to $310.80 and the Select cutout was higher $3.38 to $287.99.
Feeder cattle
Feeder cattle also traded lower today, with the August contract down 55 cents to $158.77 and the September contract down 22 cents, closing at $162.82. The CME Feeder Cattle Index was down 14 cents to $156.19.
“The initial driver behind the market selloff has been the renewed gains in corn prices. But as more volume trickles into the complex, the focus on eroding live cattle markets and questions of beef demand support through the winter months is starting to fade recent market optimism,” wrote Rick Kment, DTN Contributing Analyst in the midday comments.
Corn was higher today in anticipation of tomorrow’s release of the World Agricultural Supply and Demand Estimates (WASDE) report. The September contract was higher 7 cents a bushel to $5.56 and the December contract was higher 6 cents to $5.59.
Wyoming: Winter Livestock in Riverton sold 228 head on Tuesday. Compared to two weeks ago, slaughter cows sold steady, with instances of $3-5 higher, with slaughter bulls firm. There were not enough feeder calves or feeder cows for a good market test. A lot of six steers averaging 915 lbs. sold for $135.50. — Charles Wallace, WLJ editor
