Friday markets
Futures markets were a little cautious today after a great two-day limit rally. June live cattle gained 65 cents to close at $94.65 and August lost 25 cents to $100.20. Feeder cattle gave some money back today with May feeders losing $2.37 to $127.90, and August gave back $1.20 to $136.95. Cash trade is $10-15 over the board.
DTN reported, “Given the robust jump the market made over the last two days it makes sense that trades are leery about jumping prices higher again heading into the weekend. But regardless of what the board is doing, cash cattle prices have jumped higher again in the South. The first round of trade in the South came as a surprise as prices were $10 higher than last week but another round of fats sold Friday morning in the South for $115, pushing prices $15 higher than last week’s weighted average.”
Boxed beef values continued its historic run, but gains are smaller; Choice was $2.34 higher to $460.88 and Select was 42 cents higher to $448.99 on 106 loads. Trim markets are robust with the 90 percent lean trading higher to $288.99 and the 50 percent fat is trading at $287.70. Remember the 50s were under $30 just six weeks ago. It was estimated that packers processed only 85,000 head today.
On feeder cattle DTN also reported, “Feeder cattle contracts were leery to push prices much higher than Thursday’s enormous rally and have since tipped the scales lower. The board’s regression shouldn’t heavily affect sale barns sales through Friday and Saturday as the day’s market seems to simply be catching its breath after a strong advancement over the last couple of days.”
Cassie Fish in The Beef commented today, “Again different companies are handling the disparity between wholesale beef prices and live cattle prices differently. Anything resembling normal price discovery is non-existent. That is likely to continue to be the case until slaughter begins normalizing, which is probably week after next.
“Even this week there’s a chance slaughter could reach 470k head and next week approach 500k,” Fish surmises. “More slaughter means more beef and the shortages seen throughout the supply chain will finally begin to see a bit of relief. The ups in the cutout are still big but the acceleration seems to be slowing.”
Feeder cattle markets should start gaining strength after the futures rally the past two days. West Coast markets are getting ready for their special off-the-grass feeder sales. However, in Oklahoma there were 39,423 head of feeders sold this week and USDA reported, compared to last week: Feeder steers sold $1-$8 higher. Feeder heifers were $1-$10 higher. Demand was characterized as moderate to good for all classes. Steer calves sold steady to $10 higher and heifer calves were steady to $6 higher. Auctions saw large numbers again this week. Thunderstorms and rain are expected for most parts of the trading area heading into next week. Slaughter cows sold steady to $10 higher. Slaughter bulls sold steady to $10 higher. Demand was moderate to good. Benchmark feeder steers sold between $130-$140.
The Wyoming weekly summary out today showed two Wyoming auctions reporting 6,118 head sold and, compared to last week, feeder steers and heifers sold with a steady to higher undertone on comparable offerings with a nice offering of many long strings noted. Benchmark steers weighing 750 lbs. sold between $130-$140. Slaughter and feeder cows were steady to $4 higher with most cows returning to the country, and slaughter bulls $5-$8 higher. Demand was moderate to good for all classes, especially cow-calf pairs. All bred cows were pretested for age, pregnancy and bangs vaccination. — Pete Crow, WLJ publisher
