Tuesday markets
Despite lower corn futures, the market saw little support, closing slightly lower. The CME Group has also announced changes to price limits on cattle futures.
The CME Group announced it will reset price limits for live and feeder cattle effective June 1. Live cattle’s future limit will change from the current initial limit of $5/cwt to $5.75/cwt, and the expanded limit will increase to $8.50/cwt. The feeder cattle’s initial limit will increase from $6.25/cwt to $7/cwt, and the expanded limit will increase to $10.50/cwt.
Live cattle closed lower, with the May contract down 17 cents to $133 and the August contract down 42 cents to $133.47.
“CME cattle futures have already priced in a significant summer break, with June live cattle $9 under last week’s cash price,” Cassie Fish, market analyst for The Beef, wrote. “Futures are oversold and have traded on both sides today in quiet, choppy trade. Rallies will be difficult to sustain.”
Cash trade was active today, with 24,011 head selling between $138-142, averaging $139.23. Dressed steers sold between $219-227 and averaged $225.84.
ShayLe Stewart, DTN livestock analyst, wrote in the midday comments that some trade occurred in the North at $227 for deferred delivery in the first week of June. “With packers having a plethora of cattle committed for this time and showlists growing, it makes sense that prices are being pressured,” Stewart wrote.
On the formula side, 23,600 head averaging 856 lbs. sold for $230.23.
The national weekly direct beef type price distribution for the week of May 9-16 was the following on a live basis:
• Negotiated purchases: $142.42.
• Formula net purchases: $143.91.
• Forward contract net purchases: $144.37.
• Negotiated grid net purchases: $142.61.
On a dressed basis:
• Negotiated purchases: $228.91.
• Formula net purchases: $229.80.
• Forward contract net purchases: $225.34.
• Negotiated grid net purchases: $230.30.
Slaughter for the day is projected to be 125,000 head, the same as last week.
USDA’s Agricultural Marketing Service released the National Weekly Fed Cattle Comprehensive report, showing quality grading at 80.8 percent and dressed weights lower 11 lbs. to 859.5 lbs.
Boxed beef prices were higher on 118 loads, with the Choice cutout up 17 cents to $260.48 and the Select cutout up $2.52 to $248.19.
“Packer margins slipped under $200 per head net last week for the first time since early January 2021,” Fish wrote. “Retail beef demand has slowed so wholesale prices continue to uncharacteristically struggle in May, usually a premier beef demand month. In fact, the USDA Comprehensive Boxed Beef price made a new low for 2022 two weeks in a row.”
Feeder cattle
Feeder cattle were slightly lower, with the May contract down 22 cents to $157.17 and the August contract down 65 cents to $166.77. The CME Feeder Cattle Index was down 73 cents to $155.27.
“The feeder cattle complex is so thinly traded that any essence of pressure can keep the market from trading higher,” Stewart wrote. “Corn prices are lower heading into Tuesday’s afternoon, but with cash cattle trade beginning to develop at $2 weaker than last week’s business, the feeder cattle contracts are teetering on whether they should trade higher thanks to weaker corn or follow in line with the live cattle market.”
Corn closed lower, with the July contract down 8 cents to $8.01 and the September contract down 5 cents to $7.73.
Iowa: Russell Livestock in Russell sold 3,947 head Monday. Compared to the previous auction, steer calves 300-650 lbs. sold $2-8 higher, 650-750 lbs. traded $5-8 higher and 750-950 lbs. were firm. Heifer calves 300-650 lbs. sold $3-8 higher, and 650-950 lbs. traded $2-5 lower. Benchmark steers averaging 777 lbs. sold between $151.25-165.25 and averaged $160.58.
Nebraska: Tri-State Livestock in McCook sold 855 head Monday. Demand was good, but there were not enough sales for a comparison. A group of steers averaging 732 lbs. sold for $150.50.
Crop progress
Better weather conditions resulted in a push to plant corn. USDA’s National Agricultural Statistics Service showed that 49 percent of the crop was planted as of Sunday, a jump of 27 percentage points from 22 percent the previous week. Planting in the upper Midwest continues to lag due to cold weather, with just 4 percent of the corn crop planted in North Dakota, followed by South Dakota at 31 percent and Minnesota at 35 percent. Along the Corn Belt, Iowa planting jumped ahead a whopping 43 percentage points last week to reach 57 percent complete. Nebraska corn was 62 percent planted, Missouri corn was 65 percent planted and Texas’ crop was 87 percent planted.
The Wheat Quality Council is beginning its winter wheat tour in Kansas today. Kansas’ winter wheat was 60 percent headed as of Sunday, moving slightly ahead of the state’s five-year average of 58 percent. Oklahoma’s crop was 78 percent headed, Nebraska jumped to 10 percent and Texas’ crop was 86 percent headed.
The pasture and range conditions will be posted with Thursday’s Drought Monitor. — Charles Wallace, WLJ editor
