Thursday markets
Gains in corn futures pressured the livestock market lower, while boxed beef shows signs of reaching its top, but continues to show slight gains.
The June live cattle contract was lower 35 cents to $116.60 and the August contract closed down 25 cents to $119.87.
A total of 14,153 head traded on the cash market between $118-120, averaging $119.74. Dressed steers sold between $188-193, averaging $190.55. On the formula side, 31,800 head averaging 856 lbs. sold for $193.12. Negotiated cash trade has been slow on moderate demand in the western Corn Belt and Nebraska. Trade was mostly inactive in Colorado and the Texas Panhandle.
Slaughter for the day is expected to be 119,000 head and the week-to-date totals are well above last week’s pace, with 472,000 head slaughtered this week versus 463,000. The folks at the Cattle Report are stating the industry needs a safety valve to allow more cattle to be processed while behind the scenes negotiations between workers and processing companies occur.
“Super high prices for beef is not good for the industry or beef’s competitive position. The last thing the industry needs is for high prices to push consumers to alternative protein offerings on the market today.”
Boxed beef prices continued to climb, with the Choice cutout up 80 cents to $324.18 and the Select cutout higher $1.92 to $301.61 on 70 loads.
Beef net sales of 56,900 metric tons (mt) for 2021 were up noticeably from the previous week and the prior four-week average. The three largest buyers were the Netherlands (33,700 mt), China (9,200 mt) and Japan (5,900 mt). Traders were questioning the totals reported for the Netherlands as this was an anomaly and the total amount was the highest since January 2002.
Feeder cattle
Higher corn prices pulled the feeder cattle market lower, with the May contract down 82 cents to $135.75 and August closing $1.80 lower to $151.07. The CME Feeder Cattle Index was higher 16 cents to $133.86. July corn was higher 6 cents to $6.64 a bushel and September up 12 cents a bushel to $5.79.
Analysts surveyed ahead of Friday’s Cattle on Feed report show expectations for larger inventory, higher placements, and higher marketings than 2020. The estimate for inventory is 3.7 percent above May 1, 2020. Placements are estimated to be 21.3 percent higher year over year. April marketings are estimated at 33.6 percent above 2020.
South Dakota: Hub City Livestock in Aberdeen sold 5,229 head on Wednesday. Compared to the last auction, steers 800-900 lbs. sold steady to $2 lower and 901-1000 lbs. were mainly steady. Heifers 600-650 lbs. sold mostly steady and 651-950 lbs. were $2-6 higher, except 700-750 and 850-900 lbs. were not well compared. Benchmark steers averaging 770 lbs. sold between $140-144.50.
Nebraska: Bassett Livestock in Bassett sold 405 head on Wednesday, not enough for a trend. A group of steers averaging 795 lbs. sold between $137-141.75. Huss Livestock in Kearney sold 3,572 head on Wednesday. Compared to the last auction, steers over 700 lbs. sold $4-8 higher and heifers over 600 lbs. sold $4-6 higher. Benchmark steers averaging 759 lbs. sold between $140.50-150.50. — Charles Wallace, WLJ editor
