Friday markets
Cattle futures ended the week higher, recovering some of the losses from earlier in the week.
Live cattle futures were in the green today, with the June contract higher 55 cents to $116.02 and the August contract up 37 cents to $118.85.
The cash cattle market was mainly inactive, with 1,229 head sold at $119. There was not enough activity for a market trend in dressed steers. On the formula side, 26,700 head averaging 842 lbs. sold for $190.94.
“Packers have bought the cattle they’re going to buy, the boxed beef market has already made huge leaps and bounds throughout the week, and now it’s just time to let traders trade until the day’s final bell,” ShayLe Stewart, DTN livestock analyst, stated in her midday comments.
Boxed beef prices were mixed on 64 loads. The Choice cutout was lower 49 cents to $305.88 and the Select cutout was higher 91 cents to $290.27.
According to the Cattle Report, packer margins are estimated at $700-800/head, “processors are working as hard as they can but unfortunately, that is not enough as slaughter rates fail to satisfy demand and plants can’t muster anymore. This week’s slaughter, currently 7,000 under last week, is likely to be short of last week’s 649,000.”
Slaughter for today is estimated to be 111,000 head, slightly behind last week’s daily slaughter numbers. The estimated slaughter for Saturday is 57,000, bringing the total slaughter for the week to 638,000 head.
Weekly exports showed net sales of only 16,900 metric tons (mt). This was 28 percent below the previous week and 18 percent below the four-week average.
“Price might be getting too high for the international appetite,” Robin Schmahl, DTN contributing analyst, wrote in DTN Early Word Livestock. “This may make more beef available to the domestic market. Technically, live cattle futures are attempting to build a level of support with futures moving in a fairly sideways pattern over the past two weeks.”
Feeder Cattle
Feeder cattle traded higher, with the May contract up $1.25 to $131.72 and the August contract up 87 cents, closing at $144.27. CME Cattle Feeder Index was down $1.72 to $130.83.
“Earlier in the day, the corn market was dancing on both sides of steady, seeming unsure if the market could pull off another day of higher gains,” Stewart wrote. “But, nevertheless, the complex is back to feeling like its normal self and is climbing modestly higher.”
Corn contracts rallied at the close, with the May contract up 13 cents to $7.63 a bushel and the July contract up 13 cents as well, closing at $7.32 a bushel.
“Producers can’t change the weather or call in more rain. They can choose other feed ingredients. Wheat is 10 percent or more cheaper than corn and switching just makes good sense. Half of our corn crop feeds the heavily subsidized ethanol market and that needs to stop,” the Cattle Report wrote.
The USDA National Weekly Feedstuff Wholesale Prices reported for the period ending May 4, wheat middlings in Kansas City were $121.50 and distillers dried grains in Nebraska were $232.50. — Charles Wallace, WLJ editor
