Monday markets
Cattle markets reacted with healthy gains to the bullish Cattle on Feed report showing cattle placements below analysts’ expectations.
“Several traders were expecting a surprise on the upside for placements during September,” the folks at The Cattle Report wrote. “The pre-release average guesses were 101.2 percent of last year, and the actual numbers were only 97 percent. USDA can revise the numbers and has done so in the past. The number as reported is bullish to the first quarter of 2022, and futures are likely to rise this morning.”
Live cattle futures traded higher in the wake of the report, with the October contract up 92 cents to $125.02 and the December contract up $1.20 to $129.52.
Cash trade was nonexistent, with 274 head sold—not enough for a market trend. On the formula side, 42,800 head averaging 879 lbs. sold for $199.14.
“The week will begin with higher asking prices and light trading until the relative strengths of the positions are determined,” the Cattle Report said. “Packers will enter the week short bought, but able to cover this week’s needs. Last week closed with packers refusing to raise prices in the South after gains reported in the North.”
For the seventh week in a row, cattle in the South traded at $124, and Northern dressed cattle traded at mostly $196.
Cash trade for the week ending Oct. 24 totaled 78,746 head, down 17,000 head from the week prior. Live steers averaged $124.48, and dressed steers averaged $195.81.
Slaughter for the day is expected to be 122,000 head, 1,000 head below last week.
“One piece of genuinely good news was last week’s slaughter at 661K head, thanks to a big Saturday kill of 67K head,” Cassie Fish, market analyst for The Beef, wrote. “This week is estimated from 657K to 662K head. Big kills, as often as possible, are the single most important factor influencing the cattle market.”
Boxed beef prices were higher on 136 loads, with the Choice cutout up $1.22 to $283.04 and the Select cutout up 8 cents to $263.19.
Feeder cattle
Feeder cattle followed the lead of live cattle and reacted favorably to the report. The October contract was higher 20 cents to $155.62, and the November contract was higher $1.57 to $158.47. The CME Feeder Cattle Index was up 22 cents to $155.41.
“The focus on November and January futures, which have quickly offset Friday’s losses, could help to sustain follow-through buyer support across the complex,” Rick Kment, DTN contributing analyst, wrote in the midday comments. “Although the lower placement numbers are bullish, this is still not enough change in market fundamentals or technical factors to abruptly change the overall tone of the market in the upcoming days. If current support can hold through the week, the potential to build on this momentum may help to set a recovery pattern for feeder cattle futures, which tumbled over $13/cwt over the past two months.”
Grain commodities finished the day mixed, with both the December and March contract closing the day unchanged at $5.38 and $5.46, respectively.
Missouri: Joplin Regional Stockyards in Carthage sold 4,000 head on Monday. Compared to the previous week, feeder steers under 600 lbs. were trading $4-7 higher, and heavier weights were trading steady. Feeder heifers were trading steady. Benchmark steers averaging 775 lbs. sold between $156-159, averaging $158.11.
Oklahoma: Oklahoma National Stockyards in Oklahoma City sold 8,500 head on Monday. Compared to the previous week, feeder steers were steady to $2 higher. Feeder heifers traded $2-4 higher. Benchmark steers averaging 719 lbs. sold between $145-158 and averaged $155.08. — Charles Wallace, WLJ editor
