Friday markets
Markets are slowly turning more bearish. The national feeder and stocker cattle summary report described steers and heifers selling uneven compared to last week, $1 lower to $2 higher. Demand was moderate to good this week with a large turnout at auctions.
The three largest feeder cattle auctions in the country traded more than 36,000 head this week, about 18 percent total of auction feeder cattle sold nationwide. Auction receipts were around 15 percent less than last year, according to the report.
Weekly cattle slaughter is estimated at 636,000 head, up 112,000 head from last week but still 29,000 head down from a year prior. Slaughter has been above 100,000 head each day for the past two weeks.
With the increased slaughter levels, boxed beef prices have dropped drastically and continue to fall. The Choice cutout was reported around $11 lower at $261.48 and Select down almost $14 to $246.42. The cutout has experienced nearly a $100 drop in the past week. Recall the Choice cutout was $475 just a few weeks ago.
“The potential for additional end-of-week losses in nearby contracts is adding a slightly bearish tone to the entire live cattle complex with prices hovering near the bottom of the short-term trading range seen over the last couple of weeks,” Rick Kment, DTN analyst said.
“Although long-term support levels are not likely to be tested, the inability to spark underlying support based on widespread losses developing in boxed beef values could further weaken price levels in the near future,” he continued.
Live cattle traded slightly down: June at $93.90 (down $1.82); August at $96.17 (down $1.75); and October at $99.30 (down $1.57). Feeder cattle also traded slightly lower: August at $134.17 (down 55 cents); September at $135.47 (down $1.02); and October at $136.07 (down $1.20). The latest known CME Feeder Cattle Index was $127.93, down 72 cents.
“With increased focus on falling wholesale beef values and the uncertainty of what impact this will have on future trade activity, traders seem to be comfortable keeping prices moving back and forth in the narrow to moderate range near $135 per cwt in nearby contracts,” Kment said.
Trade was slow on light demand in the Texas Panhandle and Nebraska. Negotiated cash fed cattle prices were $3-10 lower in the Southern Plains at mostly $105-117. Dressed sales in Nebraska were $3-5 lower at mostly $175-185. — Anna Miller, WLJ editor
