Wednesday markets
Everything was green on the futures market and traded limit-up or near limit-up on all contracts. Let’s hope the bulls are back and ready to get this market where it needs to be. June live cattle were $3 higher to $89.45 and August up the same to $95.45. Feeder cattle were strong with May feeders up $4.50 to $124.10 and August feeders up $4.50 to close at $132.75. It was a good day for the futures.
As of Wednesday, negotiated cash, demand was light to moderate in the Southern Plains. Compared to last week, early live purchases traded steady to $5 higher, ranging from $95- $110, the bulk at $110. Trade was light on moderate demand in Nebraska and the Western Corn belt. In Nebraska, live purchases traded steady compared to Tuesday at $95.
Dressed purchases were mostly steady compared to Tuesday ranging from $145-$180, bulk at $150. In the Western Corn belt, compared to Tuesday, dressed purchases traded steady to $10 higher, ranging from $145- $180, bulk at $180. There were 7,900 head priced on the formula grid at $166.22. 15,380 head confirmed sales averaged $104.94 live and $163.15 dressed.
Meat markets were stronger with reduced slaughter, there were 82,000 head processed today, which was 10,000 more than Tuesday’s slaughter. The Choice boxed beef gained $20.19 to $449.18 and Select gained $21.25 to $431.96 on 110 loads, a new record.
The comprehensive cutout was $304.28 on 4,440 loads for the week ending May 1. Grinding markets were hot to say the least, 90 percent trim was at $273.07 and the 50 percent lean trim was trading at $284.0. The ground beef markets were constricted. Wendy’s said they wouldn’t offer hamburgers in 18 percent of their stores.
Cassie Fish’s comments in The Beef for the day were, “The online fed cattle auction along with light negotiated cattle trade in Texas and Kansas has established this week’s cash price at $95 compared to last week’s $98 average in a range of $93 to $105. So, unless one packer decides to pay up due to the continued meteoric rise in wholesale beef prices this week related to very small production, then $95 could be the market.
“CME cattle futures are chopping sideways today in light volume, Jun live cattle a little more than $8 discount to cash, modest compared to recent history. Futures have transitioned to a realizing bear market which will likely dominate futures trading for many, many months to come.
“The early April futures low could have been the low of the move were it not for coronavirus’s impact on the U.S. meat packing industry. But the dramatic harvest short-fall, which will persist for a total of seven or eight weeks at least, is creating a backlog of market-ready cattle never seen before. Absenteeism continues to plague plants that are running decently while other plants are still struggling with an illness outbreak in the plant.
“For now, the doubling of wholesale prices in a few weeks coupled with the scrutiny of some government officials has packers paying prices pretty much steady with what the same companies paid last week. This in spite of the ballooning supplies and need for limited volume of purchases. The last couple of weeks, the national total volume for cattle traded is just above 60,000 head, the majority of which were in Nebraska and Iowa, which is typical.”
Miles City Livestock Auction in Montana offered 992 head. The best test for feeder steers was 650-699 lbs., which sold mostly $5 lower. All other weights of feeder steers were too lightly tested to trend, however lower undertones were noted. Feeder heifers were too lightly tested to develop an accurate market trend, however lower undertones were noticed.
Quality this week was mostly plain to average and significantly lower than last week. CME contracts traded with triple digit losses today and buyers showed limited demand as a result. Demand was mostly light for light offerings. Market activity was slow. Weigh up cows sold on mostly moderate to good demand for moderate offerings. Slaughter cows sold mostly $1-3 higher on boning and lean cows, and breaking cows were too lightly tested to develop an accurate market trend, however higher undertones were noticed.
Winter Livestock Auction in Dodge City, KS, sold 1,967 head and reported, compared to last week feeder steers sold $2-4 higher and steer calves were not well tested. Heifers were also not well tested this week, however there was a lower undertone on heifer calves and higher undertone on yearling heifers. For slaughter cows, breaking utility had a firm undertone noted, boning utility was $4-5 higher and lean utility was $1-2 higher.
Producers Livestock in Salina, UT, sold 658 head and reported feeder steers $5-10 lower, and feeder heifers $10-12 lower. Slaughter cattle were $10-15 lower. The CME Feeder Cattle Index was at $119.59. — Pete Crow, WLJ publisher
