Tuesday markets
Higher live cattle contracts buoyed feeder cattle despite higher corn contracts.
Live cattle futures were green across the board, with the August contract up $1.92 to $121.75 and October up $1.37, closing at $127.17.
“Tuesday hasn’t been a ‘hem-haw around’ kind of day for the live cattle contracts!” ShayLe Stewart, DTN livestock analyst, remarked. “When the August live cattle contract neglected to close above the 40-day moving average Monday afternoon, a downward deterioration was expected for the complex as pressure seemed to be weighing heavily on the market.”
Cash trade was moderate, with 13,878 head sold between $119-125, averaging $121.53. Dressed steers sold between $191-197, averaging $196.47. On the formula side, 29,700 head averaging 846 lbs. sold for $200.79.
“As boxed beef values sink, cash cattle prices have been consolidating in the $120 to $125 area, with $120 good support,” Cassie Fish, livestock analyst, wrote in The Beef. “In fact, there has been some cash trade in Kansas today at $120. Nebraska continues to trade at a significant premium, a large string selling yesterday for $125 to a regional packer.”
Boxed beef traded lower today on 178 loads. The Choice cutout was down $1.66 to $273.34 and the Select cutout was down $2.03 to $256.74.
The latest consumer price index (CPI) showed inflation up 0.9 percent and 5.3 percent above last year—the biggest increase since 2008. CPI for beef was 5.3 percent higher than the previous month but 2.8 percent lower than a year ago.
Slaughter for Tuesday is expected to be 121,000 head—2,000 head above last week and 4,000 head above last year.
Feeder cattle
Feeder cattle were higher today, recovering some of Monday’s losses. The August contract was higher 67 cents to $158.82 and September’s contract was up 62 cents, closing at $161.62. The CME Feeder Cattle Index was up $1.05 to $153.82. Corn futures were higher, with July up 7 cents to $6.77 and September up 6 cents to $5.51 a bushel.
“Even though the corn market is rallying, the feeder cattle contracts have had a change of heart and are finding confidence in the fact that the live cattle contracts are rallying, and the market continues to see strong interest from calf buyers,” Stewart said.
South Dakota: Sioux Falls Regional Auction in Worthing sold 2,905 head Monday. Compared to the auction two weeks ago, feeder steers and heifers sold unevenly steady. Demand for light flesh, green cattle was good with several loads of pre-conditioned yearlings this week. Benchmark steers averaging 781 lbs. sold between $149.75-155.
Western Video Market: Western Video Market in Reno on July 12-14 had a few notable trades. Kelly Ranch, LLC in Nebraska sold a lot of 185 steers weighing 850 lbs. for August delivery for $176; Mart and Cindy McNutt in Nebraska sold a lot of 500 steers weighing 970 lbs. for September delivery for $169.50; Lazy TM Livestock, LLC in Montana sold a lot of 1,190 spayed heifers weighing 910 lbs. for September delivery at $148; John and Phyllis Erb in Montana sold a lot of 1,250 steers 950 lbs. for August delivery for $147; Red Raider Cattle in Texas sold a lot of 490 heifers weighing 810 lbs. for September delivery at $151.75; Mallott Livestock, LLC in Oregon sold a lot of 480 heifers weighing 850 lbs. for September deliver at $157; Robben Ranch in California sold a lot of 125 weaned steers weighing 810 lbs. for July delivery at $160 and 330 weaned heifers weighing 750 lbs. for $161.50.
Crop progress
Corn condition improved slightly with 65 percent of the crop rated good to excellent nationwide—up 1 percent from last week and the same rating as this time in 2017.
“Rating gains in South Dakota, Iowa and Michigan slightly won out over declines in Nebraska, Kansas, Illinois and Colorado,” said DTN Lead Analyst Todd Hultman.
Soybean conditions held steady this week with 59 percent rated good to excellent—the third-lowest rating in 12 years, according to Hultman.
“Crop rating declines in Illinois and Kansas were offset by higher ratings in Iowa and South Dakota,” Hultman said.
Pasture and range conditions will be posted on Thursday with the Drought Monitor. — Charles Wallace, WLJ editor
