Tuesday markets
With the holiday-shortened trading week, grains traded limit down or close to it from the opening, providing an opportunity for feeder cattle to rally.
Live cattle futures were slightly higher, with the August contract up 40 cents to $122.40 and the October contract up 7 cents, closing at $128.15.
Cash trade was minimal and not enough for a market trend with 913 head sold today. Dressed steers sold between $199-202. On the formula side, 48,900 head averaging 852 lbs. sold for $198.80.
Cash trade last week was more active than the prior week’s 48,965 head sold. A total of 86,819 head sold on the negotiated cash market, with live steers averaging $123.99 and dressed steers averaging $198.24.
Slaughter for the day is expected to be 122,000 head and there was just a smattering of slaughter on Monday of 8,000 head.
“The next few weeks carry the potential for the largest slaughter volumes of the year. Despite a $60 drop in the choice cutout, margins remain historically large—well over $400/head,” the folks at the Cattle Report wrote. “While little has been done to construct new plants, small incremental changes at various plants will allow large daily slaughter volumes. The largest looming issue moving forward will be maintaining a stable labor force—never an easy choice but especially difficult in the current economic climate.”
Boxed beef prices closed mixed on 120 loads. The Choice cutout was higher $1.24 to $286.68 and the Select cutout was down $1.10 to $263.31.
Feeder cattle
Feeder cattle traded higher as corn was limit down 10 minutes after the opening. The August contract was higher $3.47 to $160.52 and the September contract was up $3.17, closing at $162.60. The CME Feeder Cattle Index was down 35 cents to $145.96.
“Upon chopping sideways most of last week, the market was itching for the Fourth of July to pass and to see what potential lay ahead in the weeks to come,” ShayLe Stewart, DTN livestock analyst, wrote in her midday comments.
“Buyer demand has been strong throughout the countryside, and with the corn market deteriorating even more, buyers can get comfortable with the market as concerns about their daily cost of gains become manageable.”
The July corn contract was down 41 cents a bushel to $6.56 and the September contract was limit down 40 cents, closing at $5.52 a bushel. New crop corn was also limit down with the December contract closing at $5.39.
The USDA Crop Progress report by the National Agricultural Statistics Service showed 64 percent of corn in good-to-excellent condition. The Dakotas still show a sizeable amount of corn in very poor-to-poor condition, with 27 percent in North Dakota and 26 percent in South Dakota.
Due to the holiday, auction markets were closed yesterday.
The USDA National Feeder and Stock summary report for the week ending July 3 showed a total of 158,400 head sold with 94,900 sold at auction, 28,800 sold directly and 35,000 sold through video/internet. Compared to the previous week, a light run of feeder steers and heifers sold steady to $2 higher. Demand was moderate to good with the load lots of yearlings seeing the most demand, which is always the case mid-summer when those become harder to find. — Charles Wallace, WLJ editor
