Monday markets
The discrepancy between boxed beef prices and cash cattle prices continues to be not only obvious, but seems to widen by the day.
Live cattle found some gains today. The August contract gained 77 cents to $123.52 and the October contract gained $1 to $129.12.
There was some cash trade today, although not enough trades for a live market trend. Dressed steers sold for $197. On the formula side, a total of 43,900 head averaging 870 lbs. sold for $196.54. Cash trade through Aug. 15 totaled 75,996 head. Live steers averaged $123.40 and dressed steers averaged $200.58.
“Given that last week’s trade mirrored the previous week and limited overall cattle were traded on the negotiated markets, the focus will be on packer interest over the next couple of days,” reported Rick Kment, DTN contributing analyst.
“It is likely that moderate trade will still be delayed until midweek, but asking prices are not expected to fall from previous week’s levels as feeders remain confident about the ability to move cattle at steady-to-higher price levels.”
One of USDA’s latest market reports, a summary of formulated base purchases, was released for its second time Monday. For Friday, a total of 24,771 head sold on the formula market, totaling 264,073 head for the week.
For the first week of August, live cattle purchases averaged the following:
• Negotiated purchases: $123.97;
• Formula net purchases: $123.24;
• Forward contract net prices: $125.06; and
• Negotiated grid net purchases: $122.96.
For dressed purchases:
• Negotiated cattle: $198.23;
• Formula net purchases: $195.91;
• Forward contract net prices: $190.30; and
• Negotiated grid net prices: $197.48.
Slaughter for the day is estimated at 119,000 head, several thousand head above the same time last week. Last week’s total slaughter is projected to be 639,000 head. Actual slaughter through the last week of July totaled 645,868 head—a level the industry has been stuck at for several weeks now.
Boxed beef prices have found their momentum and are not just steadily gaining, but rapidly gaining. On 78 loads, the Choice cutout increased $4.97 to $329.80 and the Select cutout increased $5.53 to $303.55.
“The $60 rally in Choice boxes since the summer low has been supported by the entire carcass, but no primal more than the rib, which gained $47 last week and is trading almost as high as the 2020 pandemic high—without the slaughter shortfall this time,” wrote Cassie Fish, market analyst, in The Beef. “‘Normal’ boxed beef prices would have topped in August, but there is nothing normal about this price increase.”
Feeder cattle
Feeders lost some value today. The August contract lost 85 cents to $157.20 and the September contract lost $1.07 to $162. The CME Feeder Cattle Index lost 29 cents, closing at $155.54.
Corn prices also lost a few pennies today, with the September contract down 3 cents to $5.64 and the December contract down 4 cents to $5.68.
“The narrow losses in grain trade Monday morning did very little to bring support to the entire feeder cattle complex as traders are still trying to adjust to the bullish grain market reports seen last week,” Kment said. “This has the potential to create additional softness in feeder cattle futures, especially given limited support in live cattle trade during mid-August.”
Missouri: Joplin Regional Stockyards in Carthage sold 4,500 head Monday. Compared to the last sale, feeder steers and heifers traded steady at the mid session. Benchmark steers averaging 773 lbs. sold between $155-157, averaging $155.82.
Oklahoma: Oklahoma National Stockyards in Oklahoma City sold 6,500 head Monday. Compared to the previous sale, feeder steers sold steady to $2 higher and feeder heifers sold unevenly steady. Steer calves sold $5-7 lower and heifer calves sold unevenly steady. Benchmark steers averaging 773 lbs. sold between $145-162, averaging $153.56.
South Dakota: Sioux Falls Regional Cattle Auction in Worthing sold 2,385 head Monday. Compared to the sale two weeks earlier, feeder steers and heifers sold unevenly steady. The drought has forced early weaning and sale of cattle that may have been backgrounded. Benchmark steers averaging 789 lbs. sold between $158.50-164.50, averaging $161.89. — Anna Miller, WLJ managing editor
