Thursday markets
Cash fed cattle were softer this week, losing $10-12 on both live and dressed sales, closing at $105 live and $175 dressed. Futures has been lightly stronger with June live cattle up 40 cents to $95.85 and August 72 cents higher to $98.07. Feeders were also a bit stronger with August 95 cents higher to $135.07 and September 87 cents higher to $136.65. It appears packers have quit their fed cattle support program as beef prices normalize.
ShayLe Stewart at DTN reported, “Thursday has rallied some modest support throughout the entire livestock complex and contracts are trading steadily higher at midday. The marketplace seems to be rather accepting of the upward movement and Thursday morning’s export report only helped boost the market’s morale as China did buy some U.S. pork and beef sales were higher.”
Today’s cash trade was moderate with 15,265 head trading. In the Texas Panhandle, live purchases traded $12 lower at $105. In Kansas compared to Wednesday, live purchases traded $5-$12 lower at $105. In Nebraska compared to Wednesday, dressed purchases traded steady to $10 lower at $175.
A few live purchases traded from $105-$110. The latest established live market in Nebraska was on Wednesday with live purchases from $109-$117. In the western Corn Belt a few dressed purchases traded at $175, however there was not enough trade for an adequate market test. The latest established market in the western Corn Belt was on Wednesday with live purchases from $108-$110. There were 21,400 head of formula grid cattle priced, weighing 883 lbs., and averaged $189.36.
Slaughter levels seem to be settling in between 110,000-114,000 head per day, which is still falling short of clearing backlogged cattle. However, boxed beef prices have been falling like a rock with Choice losing $23.64 to $272.26 and Select down $16.37 to $260.41 on 166 loads.
The cutout is coming out of the stratosphere and into more familiar territory. The grinding market is following the cutout down but not as sharp. Ninety percent lean was off about $15 from the day before and was trading at $292.85, and the 50 percent trim was at $73.35.
Cassie Fish’s comments for today were, “Another day and more of the same. Boxed beef prices are now $200 off their high May 13, cash fed cattle prices traded another $5 lower in Kansas today at $105, and futures are green as basis continues to normalize.
“Such is the way of things in the beef and cattle market that has seen the extraordinary become the ordinary in 2020.
“The USDA released actual data for the week ended May 23 and there was a bit of good news to be found. The actual federally inspected for that week was 17,000 larger than the estimated at 572,000 head. Steer carcass weights dropped 7 lbs. as more calf-feds entered the supply chain. Steers carcasses averaged 894 lbs., 44 lbs. above the 5-year average and 30 lbs. above the prior heaviest carcass weight years which occurred in 2015,” she continued.
“The pace of the cutout value decline will outstrip that of fed cattle prices, but cattle prices too will leak lower over the summer. Creating economic incentive to absorb a large Q3 beef supply by pricing ample supplies of beef once again at attractive levels to end users is key to supporting weekly production levels of +650,000 head.
“The truth is just how much downside this market will see in Q3 remains unclear and up for much debate. June slaughter needed to be 665,000-673,000 in order to remain current if the industry was having a normal year—which it certainly isn’t. By the July 4 week, even with improving slaughter weekly, the backlog will become more burdensome as will the challenges.”
Feeder cattle
Cattlemen’s Livestock Market in Galt, CA, offered 6,375 on their June 1 and June 3 special sales. They reported the market steady with 400-500 lbs. steer calves trading between $135-172.50, yearling 700-800 lbs. steers traded between $120-145. Beef slaughter cows sold $68-81. The sales are getting larger as the grass dries out in California.
OKC West offered 11,392 head and said feeder steers traded $2-3 higher. Feeder heifers sold steady. Demand was moderate to good. An abundance of Northern interests were in attendance today. Steer and heifer calves were too lightly tested for an accurate trend; however, a lower undertone was noted. Demand was moderate and quality plain to average.
Bluegrass Stockyards in Lexington, KY, offered 1,652 head and compared to last Tuesday, feeder steers under 600 lbs. sold $2-4 higher with very good demand. Yearling steers sold $3-6 higher with very good demand. Feeder heifers sold steady to $2 higher with best demand for 500-600 lbs. and yearlings.
Slaughter cows sold $1-2 lower in a light test. Slaughter bulls sold steady. There was good buyer participation on an active market and a very good calf quality with many weaned offerings and good quality yearlings on offer. — Pete Crow WLJ publisher
