Tuesday markets
Concerns regarding the omicron variant pushed the market lower, including the stock market.
“As if the struggles of a scant labor force and a broken supply chain weren’t problematic enough, the pressure of the unknown surrounding the omicron variant is having a toll on the live cattle contracts,” ShayLe Stewart, DTN livestock analyst, wrote in the midday comments.
Live cattle contracts were sharply lower, with the December contract down $1.05 to $135.87 and the February contract down $1.40 to $137.90.
Cassie Fish, market analyst for The Beef, wrote managed funds are turning into sellers, “joining most other markets today from grains to equities, and the cattle market is falling along with them, no doubt inspired by the new COVID-19 strain. Markets always find a reason to correct. Futures were extremely overbought coming into this week.”
Cash trade was light, with 3,792 head selling between $135-139, averaging $138.85. Dressed steers 65-85 percent Choice traded at $218. On the formula side, 32,200 head averaging 880 lbs. sold for $215.73.
“Some hedged cattle feeders in Texas and Kansas have sold cattle today at $138, steady with last week’s cash average but down $2 from last week’s top,” Fish wrote. “Iowa is rumored to have traded some at $138 also. These hedgers were anxious to pull their shorts after two big down days and turned (loose) of their cattle, with the price received secondary. One major packer is willing to call at $138, hoping to attract more volume.”
The national weekly direct beef type price distribution for the week of Nov. 22 to Nov. 29 was the following on a live basis:
• Negotiated purchases: $137.97.
• Formula net purchases: $135.83.
• Forward contract net purchases: $132.49.
• Negotiated grid net purchases: $134.33.
On a dressed basis:
• Negotiated purchases: $216.28.
• Formula net purchases: $214.71.
• Forward contract net purchases: $201.72.
• Negotiated grid net purchases: $209.72.
Slaughter for the day is expected to be 122,000 head, the same as last week. USDA’s Agricultural Marketing Service released the National Weekly Fed Cattle Comprehensive report, showing quality grading was up 1.3 percent to 81.3 percent, and dressed weights were up 2.8 lbs. to 894.9 lbs.
Boxed beef prices were lower on 199 loads, with the Choice cutout down $5.90 to $271.68 and the Select cutout down $1.73 to $260.29.
Feeder cattle
Feeder cattle were modestly lower, with the January contract down 87 cents to $164.85 and the March contract down 5 cents to $166.50. The CME Feeder Cattle Index was higher $4.98 to $162.46, a 52-week high.
Corn contracts were down double-digits, with both the December and March contracts down 14 cents to $5.67 a bushel.
New Mexico: Roswell Livestock in Roswell sold 1,371 head on Monday. Compared to the last auction, steer calves under 500 lbs. sold $2 lower, calves and feeders over 500 lbs. were $4-5 higher and a few 700-750 lbs. sold $10-12 higher. Heifer calves under 500 lbs. were steady to $3 higher, and calves and feeders over 500 lbs. sold $6-10 higher. A group of steers averaging 718 lbs. sold between $149-152 and averaged $149.42.
South Dakota: Sioux Falls Regional Livestock in Worthing sold 2,893 head on Monday. Compared to the previous auction, feeder steers were steady to $3 higher, with steers 600-650 lbs. taking a significant jump higher. Feeder heifers sold steady to $2 higher, except 600-750 lbs., which were $10-11 higher. Benchmark steers averaging 725 lbs. sold between $158-170, averaging $166.43. — Charles Wallace, WLJ editor
