Tuesday markets
“The feeder cattle complex continues to drown in agony as grain futures soar higher,” ShayLe Stewart, DTN livestock analyst, wrote in the midday comments. Nearby corn contracts closed above $7 a bushel, and live cattle experienced pressure from feeder cattle.
Live cattle closed lower in nearby contracts, with the April contract down 90 cents to $140.52 and the June contract down 65 cents to $137.05.
Cash trade was minimal, with 538 head sold. Dressed steers sold between $224-229, averaging $227.88. On the formula side, 22,900 head averaging 881 lbs. sold for $228.35.
The national weekly direct beef type price distribution for the week of Feb. 21 to Feb. 28 was the following on a live basis:
• Negotiated purchases: $143.26.
• Formula net purchases: $144.06.
• Forward contract net purchases: $142.54.
• Negotiated grid net purchases: $142.38.
On a dressed basis:
• Negotiated purchases: $227.02.
• Formula net purchases: $227.
• Forward contract net purchases: $214.36.
• Negotiated grid net purchases: $224.79.
Boxed beef closed lower on 144 loads, with the Choice cutout down 83 cents to $256.68 and the Select cutout down $1.89 to $251.52.
“Any day now boxed beef prices are expected to bottom, which will lend the live cattle market some positive morale,” Stewart wrote. “It’s not like packers have been scraping their last pennies together to make things work; but stronger box prices will give them more money to play with and hopefully some of those dollars will trickle into the cash market.”
Slaughter for the day is projected to be 124,000 head, a thousand above last week.
USDA’s Agricultural Marketing Service released the National Weekly Fed Cattle Comprehensive report, showing quality grading was unchanged at 84.6 percent, and dressed weights were higher to 887.4 lbs.
Feeder cattle
“The fed cattle industry already struggles with leverage in a business where fed cattle processing throughput has never recovered to levels (seen) prior to COVID-19 shutdowns in April and May 2020,” Cassie Fish, market analyst for The Beef, wrote. “Any bad news, whether cattle related or not, pummels both futures prices and psychology. This is an industry made up of human beings who are exhausted from plant fires, pandemics, and now geopolitical unrest.”
Feeder cattle were lower, with the March contract down $1.45 to $156.27 and the April contract down $2.20 to $159.80. The CME Feeder Cattle Index was down 24 cents to $159.67.
“Feeder cattle futures are now at the lowest level since last November as corn prices push ever higher,” Fish continued. “Hundreds of thousands of beef cows have been and continue to be liquidated due to the drought. The 2022, 2023 and probably 2024 calf crops will be smaller every year. Because of the enormous rally in corn, feeder cattle futures are in a tailspin, down almost $16 per cwt in two weeks.”
Corn futures were up double digits, with the March contract up 42 cents to $7.39 and the May contract up 35 cents to $7.25 a bushel.
Iowa: Russell Livestock in Russell sold 3,680 head Monday. Compared to the previous auction, steer calves under 700 lbs. were mostly steady to $5 higher; over 700 lbs. sold mostly $3-5 higher. Heifer calves under 600 lbs. were mostly $2 higher, while the heavier heifers were mostly steady to $2 lower. Benchmark steers averaging 721 lbs. sold between $161-176.50, averaging $171.36.
Nebraska: Tri-State Livestock in McCook sold 1,775 head Monday. Compared to the last auction, steers and heifers under 700 lbs. were steady to $7 higher, while over 700 lbs. sold steady to $6 lower. Demand was good on lighter feeders and moderate on the larger cattle. Benchmark steers averaging 720 lbs. sold between $166-177.50 and averaged $169.15.
South Dakota: Sioux Falls Regional in Worthing sold 4,380 head Monday. Compared to the previous auction, feeder steers traded steady to $5 lower, except 650-700 lbs., which were $1-4 higher, and 750-800 lbs. sold $6-9 higher. Feeder heifers traded steady to $5 lower, except for 450-600 lbs., which were steady to $5 higher, and 700-750 lbs., which sold $2 higher. Benchmark steers averaging 726 lbs. sold between $166-176, averaging $171.60. — Charles Wallace, WLJ editor
