Thursday markets
Due to the Russia/Ukraine situation and USDA releasing crop projection estimates, market volatility sent the grain sector on a wild swing, while cattle futures closed sharply lower.
Live cattle futures were down over $2, with the February contract down $2.52 to $140.52 and the April contract down $2.45 to $142.30.
“This may not be the ultimate direction the livestock markets need to move to respond to the changes in geopolitical trade fundamentals, but it was the obvious direction to take on a day when Europe is now facing a war, the stock market is plunging, crude oil has tested the air above $100 per barrel, and grains are whipsawing up or down by double digits throughout the session,” Elaine Kub, DTN contributing analyst, wrote in the midday comments.
Cash trade was somewhat active, with 21,788 head selling between $141-145, averaging $143.43. Dressed steers sold between $226-229 and averaged $227.09. On the formula side, 26,800 head averaging 864 lbs. sold for $228.11.
Slaughter for the day is projected to be 124,000 head, 2,000 above last week.
Actual slaughter for the week ending Feb. 12 was 670,795 head. Steer carcass weights were 918 lbs., down 12 lbs. from the previous week.
USDA’s National Agricultural Statistics Service released the Cold Storage report on Feb. 22, showing total red meat supplies in freezers were up 6 percent from the previous month but down 3 percent from last year. The total supply of beef in cold storage at the end of January was estimated at 526.4 million lbs., 1.4 percent higher than a year ago and 2.9 percent
higher than the five-year average. This was the highest end-of-January beef inventory since 2016, primarily driven by more beef cuts in cold storage.
Boxed beef prices were lower on 170 loads, with the Choice cutout down $1.64 to $259.24 and the Select cutout down $4.41 to $254.55.
Feeder cattle
Feeder cattle closed down triple digits as corn closed higher, with the March contract down $3.67 to $159.10 and the April contract down $4.47 to $163.80. The CME Feeder Cattle Index was down 44 cents to $161.82.
“It’s hard to say if the volatility that’s spilling over from the feed markets is entirely due to Russian aggression and geopolitical trade risk, or how much of it might instead be related to USDA’s new baseline 2022 acreage projections, which suggested 92 million acres of corn could be planted this spring,” Kub wrote. “On its own, that number might even look a little bearish for new-crop corn prices and relieve some of the pressure from the long-term outlook for cattle feeders’ profitability. For now, though, $7 nearby corn futures and a European war are not positive for the feeder cattle market.”
Corn closed higher due to the projection, with the March contract up 11 cents to $6.95 and the May contract up 9 cents to $6.90 a bushel.
Nebraska: Bassett Livestock in Bassett sold 3,250 head Wednesday. Compared to the previous auction, steers 650 and 750 lbs. traded steady, and 700 lb. steers traded $10 higher. Heifer offerings 550-650 lbs. traded unevenly steady. Benchmark steers averaging 728 lbs. sold between $172-183.50 and averaged $181.65.
New Mexico: Clovis Livestock in Clovis sold 2,439 head Wednesday. Compared to the last auction, feeder steers and heifers traded mostly steady. Steer and heifer calves traded mostly firm to $6 higher. Benchmark steers averaging 784 lbs. sold between $151-155.75 and averaged $155.15.
Oklahoma: OKC West in El Reno sold 4,914 head Wednesday. Compared to the previous auction, feeder steers sold $2-5 lower. Due to weather concerns, the Tuesday and Wednesday sales were combined. Feeder heifers traded $4-6 lower. Steer and heifer calves sold $4-7 lower. Benchmark steers averaging 725 lbs. sold between $156.50-165, averaging $161.21.
Wyoming: Torrington Livestock in Torrington sold 2,989 head Wednesday. Compared to the last auction, steer and heifer calves traded $3-5 lower on comparable trades. Benchmark steers averaging 777 lbs. sold between $155.50-165.50 and averaged $162.01. — Charles Wallace, WLJ editor
