Wednesday markets
“Nearby live cattle trade and most feeder cattle futures are showing softness, although limited volume is likely to add to further morning pressure in most contracts,” Rick Kment, DTN contributing analyst, summarized for the day.
Live cattle futures took a dive today. The August contract lost $1.37 to $124.42, and the October contract lost $1.40 to $130.30.
“This week’s huge rally in CME live cattle futures today is undergoing a correction. Technically, the market became overstretched, so that’s one explanation,” wrote Cassie Fish, market analyst, in The Beef.
“But it is worth noting that open interest increased about 19K contracts the past two trading days, so this break out of the trading range to the upside is formidable.”
Cash trade was light today, with only 2,708 head traded. There were not enough live trades for an accurate market trend, but dressed steers sold between $200-208, averaging $204.08. On the formula side, 17,600 head averaging 858 lbs. averaged $201.28.
The Fed Cattle Exchange offered 4,676 head during their weekly online auction Wednesday. A total of 578 head actually sold, with heifers averaging $120.22 and mixed lots averaging $119.15. All successful lots came from TX/OK/NM. Opening prices for other unsold lots ranged from $120-121.25.
Slaughter for the day is projected to reach 117,000 head, several thousand head below the same time last week. Total slaughter for the week so far is estimated to be 353,000 head, also a few thousand head short of the same time last week.
“There have been rumors of minor issues at four different packing plant facilities this week that could be whittling down daily throughput and putting more pressure on Saturday to make up the difference,” Fish said. “Estimates for this week’s slaughter are still in the low 650s.”
Boxed beef prices are slightly lower, with the Choice cutout down 69 cents to $346.89 and the Select cutout down $1.21 to $315.69 on 98 loads.
Feeder cattle
Feeders were mixed today. The August contract increased 2 cents to $159.30, and the September contract declined 62 cents to $165.15. The CME Feeder Cattle Index increased $1.47 to close at $158.07.
“The stronger corn market price added early softness to feeder cattle futures, although buyers quickly stepped back into the complex as traders are still trying to fine-tune market shifts following last week’s Cattle on Feed report,” Kment said.
Corn futures found some small gains. The September and December contracts each increased 6 cents to close at $5.51.
Kansas: Winter Livestock in Dodge City sold 1,415 head Wednesday. Compared to the last sale, feeder steers 700-1,000 lbs. sold $4-7 higher. Steers and heifers 500-700 lbs. sold $2-4 lower.
Steer and heifer calves 350-500 lbs. sold $5-8 higher. Feeder heifers 700-1,000 lbs. sold steady to $3 higher. Benchmark steers averaging 776 lbs. sold between $160-165, averaging $160.33. — Anna Miller, WLJ managing editor
