Tuesday markets
The cattle complex closed mostly lower as traders were focused on the sell-off in the hog market.
Live cattle futures closed mixed, with the December contract up 5 cents to $138.22 and the February contract down 42 cents to $139.22.
“The cattle market is experiencing a real bull push, led by a strong cash fed cattle market, fueled by packer competition, and benefiting spot December live cattle,” wrote Cassie Fish, market analyst, in The Beef. “December live cattle continue to gain, narrowing the spreads today to their tightest since last April.”
Cash trade was light, with 1,950 head selling for $140.50. Dressed steers sold for $220. Negotiated cash trading has been mostly inactive on very light demand in Nebraska and the western Corn Belt—not enough purchases in either region for a market trend. Negotiated cash trade has been at a standstill in all other major feeding regions. On the formula side, 18,100 head averaging 880 lbs. sold for $225.77.
“The cash market has yet to disclose asking prices this week, but the size of Monday’s showlists was larger than in recent weeks and, alongside softer boxed beef prices, that may cause some apprehension about less aggressive packer bids when trade eventually shakes loose later in the week,” Elaine Kub, DTN contributing analyst, wrote in the midday comments.
Boxed beef prices were lower on 159 loads, with the Choice cutout down $4.50 to $268.03 and the Select cutout down $2.17 to $255.68.
“One positive note on boxed beef demand, the decline in wholesale prices sparked a spot market buying spree last week and the number of loads sold was the highest of 2021,” Fish said. “Those purchases were made with enough time for product to be received by the holidays. The good news here is that lower wholesale prices will reignite demand.”
The national weekly direct beef type price distribution for the week of Nov. 29 to Dec. 6 was the following on a live basis:
• Negotiated purchases: $140.51.
• Formula net purchases: $139.21.
• Forward contract net purchases: $134.37.
• Negotiated grid net purchases: $137.88.
On a dressed basis:
• Negotiated purchases: $219.85.
• Formula net purchases: $219.50.
• Forward contract net purchases: $203.62.
• Negotiated grid net purchases: $213.40.
Slaughter for the day is expected to be 123,000 head, a thousand above last week. USDA’s Agricultural Marketing Service released the National Weekly Fed Cattle Comprehensive report, showing quality grading was down 0.1 percent to 81.2 percent, and dressed weights were down 2.6 lbs. to 892.3 lbs.
Feeder cattle
Feeder cattle closed the day lower, with the January contract down 22 cents to $165.02 and the March contract down 47 cents to $167.47. The CME Feeder Cattle Index was up 53 cents to $160.96.
“Ultimately this week, the sentiment at the sale barns will depend on how resilient the cash market for fed cattle remains and what financial rewards those prices suggest to feeder cattle buyers,” Kub wrote. “The futures charts may be in a precarious position for the next couple of days, but no massive fundamental shift is currently expected.”
Corn contracts closed 2 cents higher, with the December and March contracts closing at $5.86 a bushel.
Nebraska: Tri-State Livestock in McCook sold 1,100 head on Monday. USDA did not provide a comparison to the previous auction but noted demand was good. A group of steers averaging 680 lbs. sold between $155.25-164.50, averaging $159.12.
South Dakota: Sioux Falls Regional Livestock in Worthing sold 3,835 head on Monday. Compared to the last auction, feeder steers under 650 lbs. were steady to $3 lower, and over 650 lbs. were steady to $3 higher. Feeder heifers under 600 lbs. had evident higher undertones; over 600 lbs. sold $1-3 higher, except 800-850 lbs., which were $1-3 lower. Benchmark steers averaging 726 lbs. sold between $161-171.50 and averaged $167.61. — Charles Wallace, WLJ editor
