Wednesday markets
Futures trended lower today, and while there was more cash trade than in previous days, prices remain stuck at $135-138.
Live cattle futures were lower, with the February contract down $1.10 to $136.57 and the April contract down 67 cents to $140.52.
The cash trade market was active today, with 20,975 head sold. Live steers sold between $135-138, averaging $136.46, and dressed steers sold for $218. On the formula side, a total of 16,600 head averaging 894 lbs. sold for an average of $227.06.
“Reduced processing plant throughput in January has raised fear and allowed packers to purchase cattle cheaper than expected the first week of January and cheaper still this week,” wrote Cassie Fish, market analyst, in The Beef. “It’s also allowed packers to purchase fewer cattle than they would if plants were running full strength.”
Slaughter for the day is estimated at 114,000 head, a thousand head more than the same time a week earlier. To date this week, slaughter totals about 341,000 head, about 4,000 head more than a week ago.
“So once again, the latest strain of COVID is grabbing headlines and dominating commerce in the beef industry. And until slaughter resumes fully, fear will dominate,” Fish said. “Yesterday’s 114k head slaughter was a tiny improvement, but well short of the 122k head that would have been likely harvested.”
Boxed beef prices continue to increase, with the Choice cutout up $1.71 to $279.93 and the Select cutout up $2.35 to $270.98 on 152 loads.
“Packer margins are expanding at a time they typically do not, thanks to the hiccup in production,” Fish said. “This story is understood, frustrating and getting very old for the cattle feeding industry.”
Feeder cattle
Feeder cattle futures were also lower, with the January contract down 20 cents to $161.87 and the March contract down $1.32 to $165.02. The CME Feeder Cattle Index lost 3 cents to close at $162.21.
Corn futures were down slightly, with the March contract down 2 cents to $5.99 and the May contract down a penny to $6.
“The feeder cattle contracts are caught again, chopping sideways as the market faces downward pressure technically,” ShayLe Stewart, DTN livestock analyst, wrote in her midday comments. “But the market can’t help but to be excited about the demand that continues to support the market in the countryside. Even though large receipts have saturated sale barns this week, the market has had plenty of buyers and prices have stayed relatively strong.”
Colorado: Winter Livestock in La Junta sold 6,615 head on Tuesday. Compared to the previous sale, steers under 450 lbs. sold $8-10 higher, 450-600 lbs. sold $3-5 higher with instances of $8 higher, 600-700 lbs. sold $1-2 higher, over 700 lbs. sold steady to $1 higher. Heifers under 600 lbs. sold $5-8 higher, 600-700 lbs. sold $1-3 higher, over 700 lbs. sold mostly steady. Benchmark steers averaging 770 lbs. sold between $153.75-157.75, averaging $156.08. — Anna Miller, WLJ managing editor
