Thursday markets
Despite a weaker than normal export report and a slower slaughter pace, the cattle complex traded in the green today.
Live cattle futures traded slightly higher, with the February contract up 10 cents to $137.35 and the April contract up 50 cents to $142.45.
Cash trade was moderate, with 4,395 head selling between $137-140, averaging $138.29. In the Southern Plains, live purchases traded at $138. In Nebraska and the western Corn Belt, live and dressed purchases traded from $138-140 and $220, respectively. On the formula side, 34,000 head averaging 902 lbs. sold for $221.73.
The Fed Cattle Exchange Auction listed a total of 1,820 head, of which 35 from California sold at $129. Opening prices ranged from $127-136, and high bids ranged from $129-136.75. The remaining 1,656 head listed were unsold, with 129 being scratched, as they did not meet the reserve prices of $129-138.50.
Slaughter for the day is projected to be 113,000 head, 4,000 below last week. Actual slaughter for the week ending Dec. 25 was 486,816 head. Steer dressed weight was 925 lbs.
“Slaughter volumes are concerning to everyone in the supply chain for cattle and beef,” the Cattle Report wrote. “If the plants can’t absorb the available supplies, the entire industry suffers. Labor woes continue to plague all plants and volumes this week are short of expectations. The three-day slaughter volume is 340,000 head when compared to 358,000 cattle in the same three-day period last week.”
Boxed beef prices were higher on 154 loads, with the Choice cutout up $1.63 to $268.56 and the Select cutout up $1.03 to $260.64.
“This week turns out to be another windfall for packer margins despite the loss of plant productivity,” Cassie Fish, market analyst for The Beef, said. “Boxed beef values are rising seasonally, now about $8 off of the low established a couple of weeks ago and far from topping.”
USDA’s weekly export sales for Dec. 24-30 showed that net sales reductions of 3,900 metric tons (mt) for 2021 were down noticeably from the previous week and the prior four-week average. Exports of 11,500 mt—a marketing-year low—were down 33 percent from the previous week and 35 percent from the prior four-week average. The destinations were primarily South Korea (4,100 mt), Japan (2,700 mt), China (1,700 mt), Taiwan (900 mt) and Mexico (700 mt).
Feeder cattle
Feeder cattle traded higher throughout the day, with the January contract up 45 cents to $162.57 and the March contract up $1.10 to $167.27. The CME Feeder Cattle Index was up 15 cents to $162.28.
“With the live cattle complex trading modestly higher, the feeder cattle futures feel secure (for the time being) to trade mildly higher as they muster some support from the live cattle contracts and thankfully demand hasn’t seemed to wane throughout the countryside even with the onset of higher corn prices,” wrote ShayLe Stewart, DTN livestock analyst.
Corn was modestly higher, with the March and May contracts up a penny to $6.03 and $6.04 a bushel, respectively.
Kansas: Winter Livestock in Dodge City sold 5,539 head on Wednesday. Compared to the last auction, yearling steers and heifers 700-900 lbs. sold steady to $3 higher. Steer and heifer calves 400-700 lbs. traded $8-10 higher. Benchmark steers averaging 728 lbs. sold between $159-168.85 and averaged $165.52.
Nebraska: Bassett Livestock in Bassett sold 6,050 head on Wednesday. Since this was the first auction of 2022, a trend could not be established. Benchmark steers averaging 725 lbs. sold between $167-176, averaging $172.79.
New Mexico: Clovis Livestock in Clovis sold 2,207 head on Wednesday. As this was the first auction of 2022, a trend could not be established. However, a higher undertone was noted for calves and feeders, with the most advance on feeders over 600 lbs. A group of steers averaging 768 lbs. sold between $142.25-153, averaging $147.26.
Oklahoma: OKC West in El Reno sold 6,963 head on Wednesday. Compared to the previous auction, feeder steers traded mostly $2-4 lower. Feeder heifers sold $1-3 higher. Steer and heifer calves that were long weaned with shots sold mostly $4-8 higher, with instances of as much as $10-12 higher on lighter weights. Benchmark steers averaging 726 lbs. sold between $157-172 and averaged $162.03.
South Dakota: Hub City Livestock in Aberdeen sold 4,390 head on Wednesday. This was the first auction in three weeks, so a trend could not be established. There was good demand on light fleshed, lightweight calves that fit grass programs and heavier feeding type calves. Benchmark steers averaging 774 lbs. sold between $153.50-167.50 and averaged $160.66.
Wyoming: Torrington Livestock in Torrington sold 4,985 head on Wednesday. This was the first auction for 2022, so a trend could not be established. Benchmark steers averaging 766 lbs. sold between $172-176, averaging $173.06. — Charles Wallace, WLJ editor
