Wednesday markets
Investors are returning to the cattle market as it finds fundamental support, causing live and feeder cattle to rally triple digits. The Dow Jones closed higher 303 points after the Federal Reserve raised interest rates by three-quarters of a point.
Live cattle are making up Monday’s losses, with the June contract up $2.55 to $137.55 and the August contract up $2.72 to $136.80.
Cash trade was light, with 9,422 head selling between $138-148 and averaging $145.06. Dressed steers averaged $230.69.
“What’s quite impressive in the latest cattle trades is the wide regional spreads, likely a reflection of what it takes these days to move cattle around and the lack of processing capacity in parts of the country,” the Daily Livestock Report wrote.
According to ShayLe Stewart, DTN livestock analyst, the market has seen some cash trade in Nebraska and Texas at fully steady with yesterday’s trade.
“Throughout the week thus far, Southern live cattle have traded from $136-139, which is steady to $2 higher,” Stewart wrote. “Northern dressed cattle have traded from $223-230, roughly $4 higher. A percentage of the dressed sales have been committed for the deferred delivery for the weeks of June 27 and July 4.”
On the formula side, 24,800 head averaging 860 lbs. sold for $219.94.
Slaughter for today is projected to be 126,000 head, the same as last week.
Boxed beef prices closed lower on 134 loads, with the Choice cutout down $1.22 to $268.22 and the Select cutout down $1.14 to $245.68.
“Boxed beef values have topped and are behaving pretty normally from a seasonal standpoint, even though cash cattle prices are not,” wrote Cassie Fish, market analyst for The Beef. “This adds up to a narrowing of packer margins this week, though they stood at +$250 per head last week.”
While the Cattle on Feed report does not come out until June 24, the Livestock Marketing Information Center (LMIC) came out with pre-report estimates for June 1, 2021. LMIC estimates the on-feed total at 101.5 percent, placements at 100.1 percent and marketings at 103.1 percent.
“Net feeder cattle imports are down about 15 thousand head from a year ago,” LMIC wrote. “Weekly receipts slowed significantly in May through total marketing channels, but auctions suggested higher volumes. One more marketing day boosted marketings over a year ago, but daily slaughter levels slowed.”
Feeder cattle
Feeder cattle closed higher, with the August contract up $1.97 to $173.27 and the September contract up $1.75 to $175.10. The CME Feeder Cattle Index was down 10 cents to $160.08.
“With the onset of a higher live cattle market, a cash cattle market that’s rallying another $2-4 higher, and upon seeing the stellar interest that Superior Livestock Auction has had thus far in their Corn Belt Classic sale, the feeder cattle market is charged and ready for more,” Stewart wrote.
Corn closed mixed, with the July contract up 5 cents to $7.74 and the September contract down a fraction of a cent to $7.29.
Texas: Lonestar Stockyards in Wildorado sold 720 head Tuesday. Compared to the last auction, feeder steers and heifers traded steady to firm. Heifer calves traded $4-5 higher. There were not enough comparable sales from the previous week on steer calves for a market trend. Benchmark steers averaging 708 lbs. sold for $159.25. — Charles Wallace, WLJ editor
