Friday Markets
Cattle trade turned active Thursday and Friday feeders held out for higher money and moved the cash market higher $110 live and $172 dressed. The sales volume wasn’t very strong compared to last week’s 123,000 head of negotiated cash sales.
Beef markets have stabilized from a nice rally, the Choice cutout was $225.98 today, and Select was priced at $209.46 on 171 loads. Slaughter levels have been robust, with 590,000 head processed so far this week. The Choice-Select spread was $16.52. carcass weights were down 10 lbs. last week, showing the cattle feeding industry has become more current, taking a lot of tonnage off the market and promoting higher slaughter levels.
Dealing with the COVID-19 virus has limited the packer’s ability to process more cattle. It is estimated that daily fed slaughter capacity is 96,000 head per day, so Saturday slaughter is important to keep the supply chain moving along. Demand is good, and packers improve their margins. There should be good demand for fed cattle going forward and hopefully larger slaughter levels of 660-680,000 head.
Nebraska’s negotiated cash sales were stronger, live purchases have moved mostly $3.00 higher to $110.00, and dressed purchases have moved mostly $5.00 higher at $172.00. Compared to the prior week. In the western Corn Belt, live purchases have moved $3.00-$4.00 higher to $108.00-$110.00 and dressed purchases were $5.00-$8.00 higher at $172.00. For Thursday in the Texas Panhandle, negotiated cash trading was inactive on light demand. In Kansas, negotiated cash trading was limited on moderate demand. A few live purchases moved at $110.00 in Kansas. However, not enough purchases for a full market trend in either region. Last week in the Southern Plains, live purchases traded at $107.00.
Futures markets were stronger most of the week, however, they gave back a few dollars in today’s trade. December live cattle were down $1.57 to $110.40 and the February contract was off $1.97 to $112.82. Feeder cattle futures had a nice rally going but also retreated today. November feeders were down $1.50 to $138.90, January was off $2.04 to $138.40. Cash sales at auction markets have been much stronger. The CME Feeder Cattle Index was higher to $137.35
ShayLe Stewart at DTN reported, “Thursday moved the market significantly higher as Northern cattle mostly sold for $172 ($7.00 higher than a week ago) and a few pens even sold for $174. There wasn’t as much action in the South, but some cattle did sell for $110 to $111, which was $3.00 to $4.00 higher than last week’s market. Packers need cattle, so before this week’s business is wrapped up, cash cattle trade should see some more action.”
Feeder cattle contracts are trading in a disappointing fashion through Friday’s trade, but given the massive support the market found earlier this week, the lack of interest late in the week isn’t surprising. The corn market is seeing a modest $0.02 to $0.03 rally, but the market’s regression stems from a lack of trader interest. According to Stewart, feeder cattle are continuing to sell with strong demand throughout the countryside as hay prices are stabilizing and wheat pasture is becoming available.
Valentine Livestock Auction, Valentine NE. sold 3,210 head Thursday and compared with last week, 450 to 600 lbs. steers traded steady to $6.00 higher and 400 to 450 lbs. heifers traded $5.00 to $8.00 higher. Demand was good with high internet bidding warmer weather in the area after freezing rain and snow. Benchmark Steers weighing 709 averaged $143.89. — Pete Crow, WLJ publisher
