Friday markets
Market volatility has occurred throughout the week and carried through today, with the livestock complex closing lower.
Live cattle futures finished the week down slightly, with the August contract down 40 cents to $122.75 and the October contract was lower 37 cents, closing at $128.12.
Cash trade was light today, with 4,874 head sold between $123-127.50 averaging $126.07. Dressed steers sold for an average of $203.05. According to The Cattle Report, “This week’s prices firmed in the South with a few trades in Kansas at $125 leaving the bulk of trades $121-122. Northern live trade was mostly $125-126. Dressed trades in the North were $198-200. The easier buys were completed earlier in the week. Sales volumes remain light for the week and the remaining cattle will take higher prices to purchase.” On the formula side, 27,800 head averaging 864 lbs. sold for $196.17.
Slaughter for today is expected to be 119,000 head and Saturday’s slaughter is projected to be 58,000 head, bringing the weekly expected total to 639,000 head.
“The daily and weekly slaughter reports are full of revisions,” The Cattle Report remarked. “Daily numbers are submitted prior to the day then revised following the day’s slaughter and most of the revisions are downward caused by plant breakdowns or labor shortages. This week’s slaughter has joined other weeks in disappointing numbers.”
Boxed beef prices rose throughout the week, with the Choice cutout up $6.90 to $324.83 and the Select cutout was higher $7.71 to $298.02. The Choice/Select spread is now $26.81 on 91 loads.
The CME Daily Livestock Report noted, “The Choice-Select cutout spread has jumped by almost $12/cwt in the last three weeks and it is now at the highest level for this time of year on record. Normally we see the spread tighten in July and August as retail demand slows down, and seasonally fed cattle grading improves compared to April and May. There has clearly been a shift in terms of supply, but we would argue that the reason for the wide spread is more demand
related.”
Feeder cattle
Short-term feeder cattle contracts were lower today, with the August contract down 65 cents to $158.05 and the September contract lower 47 cents, closing at $163.07. The October contract was higher 15 cents to $165.77. The CME Cattle Feeder Index was down 42 cents to $155.83.
“The most significant support is seen in November through March contracts as traders are once again focusing on the potential for long-term supply tightness in the nation’s cow herds, which will most significantly affect feeder cattle levels through the winter and spring months next year,” Rick Kment, DTN Contributing Analyst, wrote in the midday comments.
Corn contracts closed mixed, with the September contract up a cent to $5.68 and December was down a fraction of a cent to $5.73 a bushel.
South Dakota: Mitchell Livestock in Mitchell sold 4,866 head on Thursday. Compared to last week, feeder steers 850 lbs. and up sold $2-3 higher. Feeder heifers 600-800 lbs. sold steady to $1 higher, heifers 800-850 lbs. sold $1 lower, a steady to lower undertone was noted on heifers over 850 lbs. Demand was good with many load lots in today’s offering. Benchmark steers averaging 821 lbs. sold between $154.50-159.75, averaging $157.71.
Kansas: Pratt Livestock in Pratt sold 2,047 head on Thursday. Compared to last week, feeder steers 750-900 lbs. sold $3-5 lower. Steers 600-750 lbs. and 900-1,000 lbs. sold $8-10 lower. Feeder heifers 600-825 lbs. sold $1-4 lower. Feeder heifers 825-925 lbs. sold $8-9 higher. Benchmark steers averaging 789 lbs. sold between $151.50-155., averaging $153.90. — Charles Wallace, WLJ editor
