Tuesday markets
Traders were cautious following yesterday’s descent, resulting in the market closing mixed.
“Today, CME cattle futures are getting a solid bounce after participating in a multiple-market, nasty sell-off yesterday,” wrote Cassie Fish, market analyst for the Beef. “It is encouraging to see cattle futures potentially divorcing itself from equities, though the huge overhead chart gaps left yesterday have not been touched today.”
Live cattle closed higher, with the June contract up $1.20 to $135.20 and the August contract up 20 cents to $134.07.
Cash trade was moderate, with 14,318 head selling between $136-149 and averaged $144.23. Dressed steers averaged $224.20.
On the formula side, 24,900 head averaging 858 lbs. sold for $219.25.
“While the market does what it does, the long-term trajectory of the cattle market is still the same: stronger, higher and bullish,” ShayLe Stewart, DTN livestock analyst, wrote in the midday comments. “If anything, the market has grown more optimistic over the last week as packers showed their cards in last week’s market. Given that packers aggressively bought in last week’s market, and pushed prices $2-4 higher, there’s no denying that they’re short bought and going to have to run after cattle this week, and likely next week too.”
The national weekly direct beef type price distribution for the week of June 6-13 was the following on a live basis:
• Negotiated purchases: $140.04.
• Formula net purchases: $141.20.
• Forward contract net purchases: $159.46.
• Negotiated grid net purchases: $140.49.
On a dressed basis:
• Negotiated purchases: $226.18.
• Formula net purchases: $222.42.
• Forward contract net purchases: $225.84.
• Negotiated grid net purchases: $227.70.
Slaughter for today is projected to be 122,000 head, 4,000 lower than last week. Yesterday’s slaughter was revised down to 120,000 head.
USDA’s Agricultural Marketing Service released the National Weekly Fed Cattle Comprehensive report, showing quality grading at 80.3 percent and dressed weights lower to 852.6 lbs.
“Heat and humidity are taking a toll on feed yards as 100+ degree days follow one another,” the Ag Center wrote in the Cattle Report. “Black-hided cattle absorb the sun and the heat has been intense. Reports of 100-200 head of dead per feedyard have been reported and sometimes the rumor mill magnifies the number but the losses are material and real.”
Boxed beef closed lower on 135 loads, with the Choice cutout down $1.10 to $269.44 and the Select cutout down 63 cents to $246.82.
“On the fundamental side, boxed beef values have just now seasonally topped after staging a June rally that reached the April high,” Fish wrote. “Though a mid-June high is a bit unusual, when paired with the large beef production, indicates demand, overall, remains pretty decent.”
Feeder cattle
Feeder cattle closed lower, with the August contract down 2 cents to $171.30 and the September contract down 25 cents to $173.35. The CME Feeder Cattle Index was down 11 cents to $160.18.
“If the market continues to see strong interest throughout the countryside for calves and feeders, it’s likely that the feeder cattle market will grow stronger if fundamental support doesn’t weaken,” Stewart wrote.
Corn was down slightly, with the July and September contracts down a penny to $7.68 and $7.29, respectively.
Iowa: Russell Livestock in Russell sold 2,259 head Monday. This was a special sale, so there is no trend to report. Trade was active with good demand. Benchmark steers averaging 716 lbs. sold between $156-175.75, averaging $169.47.
Nebraska: Tri-state Livestock in McCook sold 475 head Monday. There were not enough sales for comparison. Benchmark steers averaging 767 lbs. sold between $162.50-168, averaging $167.16. — Charles Wallace, WLJ editor
