Wednesday markets
Thanks to yesterday’s surge in cash cattle prices, today’s live cattle futures were about $1.50 higher. Although there have been slimmer numbers for cash trade this week, the average price is higher to $128.
The December live cattle contract gained $1.70 to close at $131.65, and the February contract gained $1.42 to close at $136.65.
A small amount of cash trade took place today, especially compared to last Wednesday’s number, which was close to 50,000 head. Only 7,396 head traded today, although prices were higher, with live steers selling between $126-129, averaging $128.17. Dressed steers sold for $202. On the formula side, 17,500 head averaging 881 lbs. sold for an average of $207.21.
“Negotiated cash cattle prices have stalled out in the $130 area since 2017 too, when cash reached $144 on a blistering spring rally,” remarked Cassie Fish, market analyst, in The Beef. “So finally, the fed cattle market is showing true improvement for the first time since numbers cyclically peaked in 2019, only to be waylaid by a plant fire and a global pandemic.”
The Fed Cattle Exchange listed 1,752 head for its weekly auction, of which 289 actually sold. Texas sold all successful lots for $128.50.
Slaughter for the day is estimated at 122,000 head, the same as last Wednesday. The week’s total slaughter so far is projected at 365,000 head, just a thousand head short of the same time last week.
Boxed beef prices were higher on 140 loads. The Choice cutout was up $1.11 to $288.49, and the Select cutout was up $1.59 to $267.72. The Choice/Select spread has closed a bit and settled at $20.77.
“Wholesale values are advancing seasonally, up $8 or so off the lows, and will continue strong until early December typically,” Fish said. “Packer margins will probably stay very profitable as cattle prices increase, but not continue at the extreme levels that have been seen for months in 2021.”
Feeder cattle
Feeder cattle futures also had a good day today. The November contract increased $1.60 to close at $159.17, and the January contract gained $2.20 to close at $159.22. The CME Feeder Cattle Index lost 61 cents to close at $155.65.
Corn futures were down 9 cents on each contract. The December contract closed at $5.64, and the March contract closed at $5.72.
“The market has been dying to trade higher as the cattle market has grown ripe for a rally, but until the corn market’s rally subsided, rallying wasn’t an option,” said ShayLe Stewart, DTN livestock analyst, in her midday comments. “Thankfully, traders seem to be on board with shooting the market higher as technically the contracts sit without any nearby resistance.”
Colorado: Winter Livestock in La Junta sold 600 head Tuesday. Compared to the previous sale, calves and yearlings sold mostly steady in a light supply. Benchmark steers averaging 771 lbs. sold for $152.50. — Anna Miller, WLJ managing editor
