Thursday markets
Recessionary fears led to a bear market and a sharp sell-off by traders in the grain sector. Live cattle could not muster any support due to the grains and weak cash trade, and feeders are enjoying the grains’ demise, closing higher.
“Turmoil in the markets is almost becoming a permanent condition,” the Ag Center wrote in the Cattle Report. “Learning to live with volatility and unpredictability is almost routine. Trying to make sense out of the numbers is impossible and developing a rational strategy for an irrational world is frustrating and non-productive.”
Live cattle closed lower, with the June contract down 87 cents to $135.25 and the August contract down $1.05 to $133.87.
“The live cattle market flirted with the idea of trading higher, but as skepticism brews throughout the futures complex, the contracts are trading lower,” ShayLe Stewart, DTN livestock analyst, wrote in the midday comments. “Seeing the 25 deliveries made in Texas this week has set the market trending lower as there’s concern that the deliveries will scare some of the longs out of the market. You’d think that with the type of regression the corn market is enduring, even the live cattle market would appreciate the lower feed costs, but with a teetering cash cattle market and worrisome traders lower the market goes.”
Cash trade was active, with 28,110 head selling between $137-150, averaging $147.52. Dressed steers sold between $230-238 and averaged $234.02. According to DTN, “Light trade is being reported in parts of western Nebraska, at $145-147. Light trade has taken place the last two days in Kansas and Texas, with most of these live deals marked at $138, generally steady to $2 lower than last week’s weighted averages. Scattered trade was reported in parts of Nebraska and Iowa at mostly $239. Asking prices today are around $140-142 in the South and $240-plus in the North.”
On the formula side, 32,000 head averaging 857 lbs. sold for $229.58.
Slaughter for today is projected to be 122,000 head, 5,000 below last week.
Actual slaughter for the week ending June 11 was 671,075 head. Steer weights were 879 lbs.
Boxed beef prices were lower on 104 loads, with the Choice cutout down $1.91 to $264.66 and the Select cutout down $1.05 to $244.94.
USDA’s National Agricultural Statistics Service published the Cold Storage report for May, showing the total amount of beef in freezers was down 2 percent from the previous month but up 25 percent from last year at 471.07 million lbs.
Feeder cattle
Feeder cattle closed higher on the grain complex weakness, with the August contract up $1.70 to $174.85 and the September contract up $1.55 to $176.85. The CME Feeder Cattle Index was up 2 cents to $165.23.
Corn was double digits lower, with the July contract down 21 cents to $7.46 and the September contract down 35 cents to $6.66 a bushel.
“The grain complex’s weakness has come as questions about weather arise and it’s seeming like the market has realized that its upward surge was overdone,” Stewart wrote. “Nevertheless, as Northern sells 12,900 head of cattle Thursday, the board is in their favor and seeing a regression in input prices is incredibly helpful too.”
Oklahoma: OKC West in El Reno sold 7,181 head Wednesday. Compared to the last auction, feeder steers sold $2-8 higher. Feeder heifers traded $5-8 higher. Steer and heifer calves sold $4-6 higher. Benchmark steers averaging 768 lbs. sold between $171.50-181, averaging $173.63. — Charles Wallace, WLJ editor
