Tuesday markets
Cattle closed the day mixed, with short-term contracts higher and deferred contracts lower.
Live cattle futures closed slightly higher, with the February contract up 77 cents to $137.10 and the April contract up 2 cents to $140.10. The deferred contracts closed the day lower.
Cash trade was moderately active, with 14,795 head selling between $136-137, averaging $136.98. Dressed steers sold for $218. Negotiated cash trading has been slow on light demand in the Southern Plains, Nebraska and the western Corn Belt. In the Southern Plains, a few live purchases traded at $137. In Nebraska, a few live and dressed purchases sold at $137 and $218, respectively. In the western Corn Belt, a few dressed purchases traded at $218.
On the formula side, 26,200 head averaging 883 lbs. sold for $220.98.
The national weekly direct beef type price distribution for the week of Jan. 17 to Jan. 24 was the following on a live basis:
• Negotiated purchases: $137.63.
• Formula net purchases: $140.17.
• Forward contract net purchases: $139.78.
• Negotiated grid net purchases: $139.13.
On a dressed basis:
• Negotiated purchases: $217.97.
• Formula net purchases: $221.08.
• Forward contract net purchases: $213.72.
• Negotiated grid net purchases: $221.12.
Slaughter for the day is projected to be 118,000 head, a thousand head above last week.
USDA’s Agricultural Marketing Service released the National Weekly Fed Cattle Comprehensive report, showing quality grading was up 0.2 percent to 84 percent, and dressed weights were up 1.1 lbs. to 897.9 lbs.
“The big concern is how much will boxed beef prices dip?” ShayLe Stewart, DTN livestock analyst, wrote in the midday comments. “Wanting the product to be more affordable for customers is a valid plea. But on the same token, if boxed beef prices dip too much, many packers may opt to run slow processing speeds, which would drastically hinder the market’s ability to fully capture a spring rally.”
Boxed beef prices were lower on 143 loads, with the Choice cutout down $1.12 to $292.38 and the Select cutout down $1.47 to $283.32.
USDA’s National Agricultural Statistics Service released the Cold Storage report yesterday, showing the total supply of beef in cold storage at the end of December was estimated at 503.8 million lbs., up 3 percent from November but 6 percent lower than a year ago and 1.9 percent lower than the five-year average.
Feeder cattle
Feeder cattle closed mixed, with the January contract up 7 cents to $158.55 and the March contract down $1.40 to $159.85. The CME Feeder Cattle Index was down 69 cents to $159.77.
Corn futures closed the day mixed, with the March contract down a cent to $6.20 and the May contract up a penny to $6.18 a bushel.
“With the corn market trading comfortably in the $6.20 per bushel range, the feeder cattle complex is nauseous,” Stewart said. “If feeders were trading substantially higher, the market could stomach the cost of these higher inputs. But making cattle pencil in today’s market takes a crafty mind and one who likes to look risk right in the eye.”
Iowa: Russell Livestock in Russell sold 3,510 head on Monday. Compared to the previous auction, steer calves 450-650 lbs. traded $7-10 lower, while 650-850 lbs. were $1-5 lower. Heifer calves under 550 lbs. were mostly $3-8 lower, 550-600 lbs. were $4 higher and 600-850 lbs. sold mostly $2-5 lower. Benchmark steers averaging 728 lbs. sold between $155-168.75, averaging $163.12.
Nebraska: Tri-State Livestock in McCook sold 1,750 head on Monday. Compared to the last auction, steers and heifers were steady to $6 lower. Demand was good on what was offered. Benchmark steers averaging 773 lbs. sold between $156-167.50 and averaged $163.11.
South Dakota: Sioux Falls Regional Livestock in Worthing sold 5,257 head on Monday. Compared to the previous auction, feeder steers over 450 lbs. sold $3-5 lower, except 450-500 lbs., which were steady to $3 higher. Feeder steers 550-600 lbs. traded $8-10 lower, and 800-850 lbs. were steady to $2 higher. Feeder heifers over 450 lbs. sold $3-6 lower, except 500-550 lbs., which were $7-10 lower. Benchmark steers averaging 714 lbs. sold between $154-166, averaging $161.37. — Charles Wallace, WLJ editor
