Thursday markets
Today’s trade follows in yesterday’s footsteps and starts June off with a bang.
Live cattle closed higher, with the June contract up 82 cents to $133.62 and the August contract up $1.22 to $134.12.
“Traders are keenly aware that a record number of cattle sit inside feedlots in the U.S., but they’re also keenly aware of how strong the market’s export demand continues to be, and once these supplies of cattle are worked through, the market will likely face a complete 180-degree different reality with starkly fewer feeders to refill feedlots with,” ShayLe Stewart, DTN livestock analyst, wrote in the midday comments. “Nevertheless, the futures market is seeming to take into account the market’s long-term reality, although the dog days of summer must still be worked through.”
Cash trade was moderate, with 14,070 head selling between $135-143 and averaging $141.25. Dressed steers averaged $221.70.
According to DTN, a few deals are being reported at midday in parts of the North, following light to moderate trading yesterday. Asking prices for cattle are around $137 in the South and $225 in the North. A bid for $222 for dressed steers was reported in Nebraska. “While it looks like the bulk of business is essentially completed, more trade will likely take place here and there,” DTN wrote.
On the formula side, 22,500 head averaging 879 lbs. sold for $224.24.
Slaughter for the day is projected to be 127,000 head, 3,000 above last week.
Actual slaughter for the week ending May 21 was 676,743 head. Steer weights were 888 lbs.
“It will be interesting to see, given the improvement in wholesale beef movement last week, if this week’s holiday-reduced slaughter reaches 570K-580K head, rather than the 560s estimated,” Cassie Fish, market analyst for The Beef, wrote. “That would be an additional supportive factor. Next week’s slaughter could be the largest slaughter of 2022, topping the 680K posted two weeks ago.”
Boxed beef closed mixed on 131 loads, with the Choice cutout down 77 cents to $266.65 and the Select cutout up 72 cents to $249.63.
Weekly export sales will be delayed until Friday due to the Memorial Day holiday on Monday.
USDA’s Agricultural Marketing Service reports fresh beef imports through May 21 totaled 506,699 metric tons (mt), 24 percent above last year. The most significant increase from last year was from Brazil, where imports soared 575 percent from 10,630 mt to 71,798 mt thus far in 2022. Imports from Mexico increased from 96,235 mt in 2021 to 126,099 mt as of May 21, a 31 percent increase.
Processed beef imports increased 27 percent to 37,624 mt as of May 21, up from 29,579 mt in 2021.
Feeder cattle
Feeder cattle closed triple digits higher, with the August contract up $3.22 to $172.95 and the September contract up $3.07 to $175.47.
“With the corn crop being 86 percent planted and grasslands getting steady moisture throughout the week, the feeder cattle market has launched a rally and is demanding attention,” Stewart wrote.
Corn contracts closed mixed, with the July contract down a penny to $7.30 and the September contract up a penny to $7.04.
Oklahoma: OKC West in El Reno sold 7,074 head Wednesday. Compared to the previous auction, feeder steers 800 lbs. and heavier sold $4-6 higher. Lighter weight grazing type cattle traded mostly steady. Feeder heifers sold steady. Benchmark steers averaging 727 lbs. sold between $157-163, averaging $161.38. — Charles Wallace, WLJ editor
