Wednesday markets
The cattle trade at the CME was disappointing with all contracts losing a dollar or more. The only green was on August feeders. Last week’s Cattle on Feed report showing July placements up 11 percent seemed to shock the market and the instability in the corn market has feeders’ caution flag up on buying replacements.
Prices on the board were ugly to say the least. August live cattle were down $1.45 to $104.05 and October lost $1.77 to settle at $107. August feeder cattle were 22 cents higher to $142.47, however all the deferred contracts were down more than a dollar. September lost $1.30 to $141.77 and October lost $1.15 to settle in at $141.92. Country markets were showing some pressure on feeder cattle and calf contracts for fall delivery were feeling pressure.
Boxed beef prices continue their climb with Choice showing $231.45 and Select up to $214.10 on 121 loads. Packer margins remain large, over $300 per head, and they are processing as fast as they can. Slaughter so far this week was at 353,000 head, which is equal to the same week last year. Packers processed 652,000 head last week. Now that Labor Day is upon us, expect all markets to slow down.
OKC West in El Reno, OK, sold 5,563 head Tuesday and reported, compared to last week: feeder steers traded $5-8 lower; feeder heifers sold $2-4 lower. Demand was light and quality plain to average. Cattle were in full conditions. Steer and heifer calves sold with a lower undertone from last week’s plainer quality offering. Cooler temperatures remain in the forecast over the trade area. Benchmark steers weighing 761 lbs. averaged $140.05.
Cassie Fish of The Beef remarked,” On the cattle feeding side, it was clear in last Friday’s USDA Cattle on Feed report that the concentration of cattle on feed by corporate feedyards appears to be growing as their focus on a high level of occupancy as a key metric continues to support feeder cattle values.
“While in the north, states such as Iowa, Nebraska and South Dakota have 210k fewer cattle on feed than a just two short years ago.”
USDA reported that 45,610 head sold today, thus far Wednesday trade and demand were moderate in Nebraska and the western Corn Belt. Compared to last week in Nebraska, live purchases traded $1.50 lower at $105. Dressed purchases compared to last week traded $2 lower from $166-$167.50, mostly at $167.
Compared to last week in the western Corn Belt, early live purchases traded $2-$4 lower from $104-$105. Dressed purchases compared to last week traded $2 lower at $167. Trade was light on light-to-moderate demand in Kansas. In Kansas compared to Tuesday, live purchases traded steady at $105. Trade was limited on light demand in the Texas Panhandle.
The latest established market in the Texas Panhandle was on Tuesday with live purchases at $105. There were 18,200 head priced on the formula today, weighing 903 lbs. and bringing $170.29.
ShayLe Stewart at DTN said, “Wednesday has solidified the fact that most of the week’s trade is going to be slightly lower than a week ago as cattle continued to trade live for $105, and some Northern cattle have traded for $167 dressed.
“Given that packers have been extremely aggressive the last two months in their cash cattle buying, as the market looks past Labor Day, packers know that they hold most of the market’s leverage which makes it easy to push prices lower. Wednesday’s cash cattle trade didn’t become active until after the Fed Cattle Exchange where 779 head sold for $105-105.25.” — Pete Crow, WLJ publisher
