Wednesday markets
While futures suffered today, cash trade blossomed. Live steers traded for as high as $132.
Live cattle futures were mixed, with the December contract down 20 cents to $132 and the February contract up 12 cents to $126.82.
It was a good day for cash trade today. A total of 34,470 head sold between $130-132, averaging $131.49. Dressed steers sold between $205-207, averaging $206.53. On the formula side, a total of 21,700 head averaging 884 lbs. sold for $211.42.
“With hundreds of dollars on the table, the packer is aware that holiday demand needs must be met, and with plants still not running at pre-COVID throughput, cutting kills is not an option,” remarked Cassie Fish, market analyst, in The Beef. “Instead, the packer will willingly give up some of their enormous margin to the cattle feeder.”
The Fed Cattle Exchange Auction listed a total of 1,866 head, of which 741 actually sold. Opening prices ranged from $123-129, and high bids ranged from $123-131.
Slaughter for the day is projected at 122,000 head, the same as a week earlier. To date this week, slaughter is estimated at 365,000 head.
Boxed beef prices took a hit today on 195 loads. The Choice cutout lost $2.28 to close at $285.52, and the Select cutout lost $4 to close at $266.62.
“Boxed beef cutout values are record high for any November in history, but the normal, brisk holiday rally is not occurring. Instead, the market is holding at the high level, but not advancing rapidly as it did back in August,” Fish said.
“In fact, the cutout may top in November, rather than in December as is seasonally typical. And a substantial correction is likely to occur in December.”
Feeder cattle
Feeder cattle futures were lower today thanks to a surge in corn prices. The November contract lost $1.25 to close at $156.65, and the January contract lost $1.75 to close at $158.05. The CME Feeder Cattle Index was up 12 cents to close at $154.98.
Corn futures were up 14 cents on both nearby contracts, with the December contract closing at $5.69 and the March contract at $5.78.
“The market’s drop solely stems from the fact the corn market is rallying and higher input costs are always worrisome for feeders,” wrote ShayLe Stewart, DTN livestock analyst, in her midday comments.
“The demand for calves and feeders throughout the countryside still remains strong as buyers recognize the merit in the corn market’s rally. But they also see the upside potential the cattle market has in 2022 with few supplies reaping greater profits.”
South Dakota: Philip Livestock Auction in Philip sold 6,526 head Tuesday. Compared to a week earlier, feeder steers under 450 lbs. sold steady to $4 higher; 450-500 lbs. sold $4-6 lower; 500-600 lbs. sold $6-8 lower; 600-650 lbs. sold $2 lower; and 650-700 lbs. sold steady to $4 lower. Feeder heifers under 400 lbs. sold $6 lower; 400-500 lbs. sold $8-10 lower; 500-550 lbs. sold $4-6 lower; 550-600 lbs. sold steady; and 600-650 lbs. sold $3 lower. Benchmark steers averaging 658 lbs. sold between $154.24-175.50, averaging $168.70. — Anna Miller, WLJ managing editor
