Tuesday markets
The cattle complex was sharply lower after the corn market gained over 3 percent, closing above $6 a bushel.
Live cattle futures made up some ground in late trading but still closed lower, with the February contract down $1.10 to $137.82 and the April contract down $1.52 to $142.67.
Cash trade was nonexistent, with 404 head sold. Negotiated cash trading has been at a standstill in the Southern Plains, Nebraska and the Western Corn Belt. The Cattle Report states trade will likely be delayed until midweek with packers attempting to purchase cattle at lower prices. On the formula side, 25,900 head averaging 886 lbs. sold for $221.51.
The national weekly direct beef type price distribution for the week of Dec. 28 to Jan. 3 was the following on a live basis:
• Negotiated purchases: $139.64.
• Formula net purchases: $139.33.
• Forward contract net purchases: $135.37.
• Negotiated grid net purchases: $139.68.
On a dressed basis:
• Negotiated purchases: $221.54.
• Formula net purchases: $220.47.
• Forward contract net purchases: $208.42.
• Negotiated grid net purchases: $221.15.
Slaughter for the day is expected to be 117,000 head, 5,000 below last week. Monday’s slaughter was revised to 107,000 head.
“With Monday’s slaughter being so lousy, I hope that it was just a fluke where worker absenteeism was the problem after New Year celebrations and it’s not that packers intend to run slower chain speeds,” ShayLe Stewart, DTN livestock analyst, wrote in the midday comments.
USDA’s Agricultural Marketing Service released the National Weekly Fed Cattle Comprehensive report, showing quality grading was down 1.7 percent to 82.1 percent, and dressed weights were up over 4 lbs. to 899.5 lbs.
Boxed beef pricing was delayed due to a technical difficulty, but Stewart at midday reported the Choice cutout was up $1.63 to $267.66, and the Select cutout was up 68 cents to $259.58, with a movement of 58 loads.
Feeder cattle
Feeder cattle futures were trading down 2 percent but made up some ground during the trading day. The January contract was down $3.57 to $162.67, and the March contract was down $3.17 to $166.35. The CME Feeder Cattle Index was down $3 to $162.35.
“After nearly every order buyer, farm feeder and potential feeder cattle buyer in the country did some quick math on their coffee napkin—their wiggle room when it comes to buying feeders got a lot thinner,” Stewart said. “The one thing we must remember is a lot of feeders are corn producers as well. The onset of higher corn prices can be stomachable when cattle prices rally alongside higher feed prices. It’s when input costs skyrocket and the cattle market dives lower that producers can’t financially manage the blow.”
Corn rallied double digits higher on concerns of drier weather in South America. The March contract was up 20 cents to $6.09, and the May contract was up 18 cents to close at $6.09 a bushel.
According to Dana Mantini, DTN senior market analyst, weather in South America continues to be the primary market concern, with analysts and crop scouts just beginning to slash production estimates following hot and dry weather in Argentina and southern Brazil.
Iowa: Russell Livestock in Russell sold 3,856 head on Monday. Russell noted there was no recent market coverage for comparison, but trading was active with good demand on heavy offerings. Benchmark steers averaging 719 lbs. sold between $160-176 and averaged $170.96.
South Dakota: Sioux Falls Regional Livestock in Worthing sold 4,965 head on Monday. Compared to the last auction, feeder steers under 550 lbs. sold with lower undertones, while 550 lbs. and over traded $2-5 higher. Feeder heifers 550 lbs. and under sold with higher undertones, 600-650 lbs. were steady to $3 lower, 650-750 lbs. traded $7-8 higher, there was not a meaningful comparison in the 800 weights and 900-950 lbs. were $2-3 lower. Benchmark steers averaging 778 lbs. sold between $156.75-169.50, averaging $164.21. — Charles Wallace, WLJ editor
