Tuesday markets
Cattle markets traded mixed today, potentially from Argentina announcing it was halting beef exports for 30 days to curb inflation. This could give an opportunity for higher U.S. exports over the next month.
Consumer prices rose 4.2 percent in the U.S., with the folks at the Cattle Report stating beef producers have suffered an insult by not participating in the sharp rise in food prices.
“The available profits from beef production have been sequestered and divided between the retailers and processors. Consumers have been forced to pay unnecessarily high beef prices. Breeders, stockers operators, and cattle feeders have responded to the need for more beef but been cut short of the rewards. Eventually, this will all sort out,” the Cattle Report wrote.
Live cattle futures were higher, with the June contract up $1.40, closing at $116.75 and the August contract higher $1.30 to $119.72 on solid opening interest.
Cash trade was higher today, with 13,575 head selling between $119-121, averaging $120.17. Dressed steers sold for $119. On the formula side, 27,200 head averaging 856 lbs. sold for $191.41. Trade in the Northern Plains and the western Corn Belt was light, with some trade in Nebraska at $120. In Kansas, live purchases have traded steady from $119-120.
Slaughter for the day is projected to be 120,000 head, slightly above last week’s 118,000 head. According to the Cattle Report, all eyes are on slaughter volumes as a rally in fed prices would require weekly volumes to reach 670,000 head.
“The economic incentive is present with estimates as high as $800/head processing margins, but between labor problems and plant maintenance issues, the plants can’t seem to deliver the needed capacities.”
Boxed beef continues its rise on 114 loads with the Choice cutout up $3.72 to $323.34, a new high and second to last year’s pandemic-affected numbers when plants were running well-below capacity. The Select cutout was higher $2.16 to $299.05.
Feeder cattle
Feeder cattle traded lower today, with the May contract down 72 cents to $137.20 and the August contract lower 82 cents to $151.92. The CME Feeder Cattle Index was down 20 cents to $133.70.
The weekly Crop Progress report showed 80 percent of the expected corn area had been planted through May 16. The average expected plantings for this time of year is 68 percent. Corn traded higher today, with the July contract up 5 cents to $6.58 a bushel and the September contract higher 4 cents to $5.71.
New Mexico: Roswell Livestock in Roswell sold 1,187 head Monday. Compared to the last auction, steer calves under 600 lbs. sold $6-12 higher and feeders over 600 lbs. were $6 higher. Heifer calves under 600 lbs. sold $3-4 higher, and there was no comparison on feeders over 600 lbs. due to limited offerings. A total of 19 head averaging 534 lbs. sold between $166-175. — Charles Wallace, WLJ editor
