Friday markets
Cash trade was light this week as it appears that packers were well supplied and unwilling to up their bids, while feedlots are unwilling to cave into steady prices.
Today, USDA released the Cattle on Feed report, showing inventory at 11.7 million head on June 1, 2021. The inventory was slightly above June 1, 2020. This is the second-highest June 1 inventory since the series began in 1996. Placements during May totaled 1.91 million head, 7 percent below 2020. Net placements were 1.84 million head. Marketings of fed cattle during May totaled 1.87 million head, 23 percent above 2020.
June live cattle was unchanged, closing at $122.82—up $1.85 for the week. The August contract was up 17 cents to $122.80—up $1.78 for the week.
Cash trade was modest today, with 1,979 head sold at $126. Dressed steers sold between $197-203. So far, for Friday in the Southern Plains, Nebraska and western Corn Belt, negotiated cash trading has been mostly inactive with light demand. Not enough purchases in any region for a market trend. On the formula side, 21,000 head averaging 858 lbs. sold for $198.06.
“Packers appear well supplied for the next couple of weeks and some of the sales yesterday were for mid-July but at higher prices,” the folks at the Cattle Report wrote.
Slaughter for the day is estimated to be 116,000 head and Saturday is projecting 70,000 head, bringing the weekly slaughter to 661,000 head—consistent with the past two weeks.
Boxed beef traded mixed today, with the Choice cutout down $2.86 to $304.56 and the Select cutout was up 4 cents to $276.18. The boxed beef spread was $28.38 on 93 loads.
The USDA reported carcass weights for the week ended June 12 and steer carcass weights dropped to 882 lbs. As Cassie Fish, market analyst for The Beef, noted, “Normally weights have already bottomed by June 1. Last week steer carcass weights jumped up 7 pounds, also unusual. The takeaway here is that most likely, carcass weights are stabilizing in the 880–890-pound range and will track above all other years except 2020 through the summer.”
Feeder cattle
Feeder cattle traded in the green today as corn traded lower on the news from the Supreme Court on small ethanol refinery exemptions. The August contract was higher $2.40 to $159.55 and the September contract was up $2.05 closing at $161.25. The CME Feeder Index was also up $1.05 to $146.49.
Corn was lower as the ruling by the court could lower demand for corn and soybeans. The July contract was down 16 cents, closing at $6.36 a bushel and the September contract was down 19 cents a bushel to $5.30. New crop corn was down 16 cents, with the December contract closing at $5.19 a bushel.
“The feeder cattle contracts strength this past week has genuinely stemmed from the corn market’s regression,” ShayLe Stewart, DTN livestock analyst, wrote in the midday comments. “As cow-calf producers continue to face drought, high hay prices and too little water, this week’s rally was not only needed financially but also psychologically.”
South Dakota: Mitchell Livestock in Mitchell sold 5,859 head on Thursday. Compared to the previous auction, feeder steers 750-800 lbs. were steady, 900-1000 lbs. sold $3 higher, a much higher undertone was noted on steers over 1000 lbs. Heifers 700-800 lbs. were $4 higher, 800-950 lbs. were $7-10 higher, a higher undertone was noted on heifers 950 lbs. and up. Benchmark steers averaging 785 lbs. sold between $145.50-152.10.
Kansas: Pratt Livestock in Pratt sold 1,317 head on Thursday. Compared to the last auction, feeder steers 700-850 lbs. sold $2-4 lower. Steers 850-1,000 lbs. sold $1-3 higher. Feeder heifers 700-950 lbs. sold $4-7 lower. Benchmark steers averaging 885 lbs. sold between $136.85-142.50.
Texas: Cattlemen’s LIvestock in Dalhart sold 1,903 on Thursday. Compared to the previous auction, steer and heifer calves under 600 lbs. were firm in a limited test. Feeder steers and heifers 600-800 lbs. were steady with instances of $1-2 higher. Feeder steers and heifers over 800 lbs. were steady to $2 lower. Benchmark steers averaging 788 lbs. sold between $148-151. — Charles Wallace, WLJ editor
