Monday markets
There was no cash trade today. Last week 89,000 fed cattle sold between $108-110 and $173 dressed. The beef cutout has found the end of its holiday rally and is starting to decline rapidly. Last week 667,000 were processed even though some packing plants were dealing with COVID-19 issues. Packers will be buying for two short holiday weeks. Formula trade was priced at $177.59 on 28,400 head weighing 881 lbs. Slaughter is 1,069,000 head behind last year’s pace.
Futures markets were all red today with the December live cattle contract losing 87 cents to $108 and February was down $1.37 to $111.02. Feeder cattle contracts all lost $1 or more: January feeders were down $1.97 to $137.80 and March lost $1.27 to $138.15. Corn prices are climbing, making feed costs higher; December corn is at $4.19 a bushel. Usually, expensive corn makes for expensive cattle. The cash call for the week is $108-109.
Rick Kment at DTN said, “The direction of weekly cash cattle trade will be front and center in the minds of most market participants, although limited interest is likely Monday. Monday’s activity is expected to revert back to the traditional showlist distribution and inventory taking while bids and asking prices are not likely until later in the week.
“Cash cattle trade last week set the tone midweek last week with limited cleanup activity through the end of the week. With prices mostly $1 per cwt lower as the dust settles, the wider full range of trade was at $109-112 per cwt live and $172-175 per cwt dressed. This wider range is what could create increased volatility through the market early in the week as this could once again impact overall average prices, which will not be seen until midmorning Monday,” Kment continued.
“Packers need to source active cattle supplies for end-of-year needs, and this is likely to limit additional downside market pressure, but cash markets will need a little momentum shift from futures and boxed beef prices through the upcoming days.”
Feeder cattle markets are under pressure with all feeder futures falling off the recent high of $139, and with bearish undertones in the market, it may be difficult to return to the $140 level. Cattle feeders are more interested in feeding heavy cattle and they certainly don’t want to see unweaned lighter cattle. We may start to see open pens in feedlots.
National Stock Yards in Oklahoma City, OK, sold 18,000 today and reported, compared to last week: Feeder steers and heifers were steady; steer calves were steady to $4 higher; heifer calves mostly steady. Demand was moderate to good. Today’s sale includes about 3,000 head of Oklahoma Angus-influenced Special. These cattle are all at least 60 days weaned and have been documented herd health with at least two rounds of vaccinations; Angus type predominately black with no dairy influence. These cattle are identified in the report as value added. Quality average to attractive. Warmer than average temperatures are in the forecast for the rest of the week. Benchmark steers weighing 725 lbs. sold for $147.50. — PETE CROW
