Tuesday markets
Gains seen in the cattle complex yesterday carried through to Tuesday, with live cattle leading the way.
Live cattle futures started the day with modest gains but improved as the day progressed. The October contract was higher $1.80 to $126.82, and the December contract was up $1.92 to $131.45.
Cash trade was moderate, with 9,203 head selling at $126. In Kansas and the Western Cornbelt, negotiated cash trading has been at a standstill. In the Texas Panhandle, cash trade has been slow with light demand and has been mostly inactive on light demand in Nebraska. On the formula side, 21,700 head averaging 882 lbs. sold for $200.83.
“The recent uptick trend in the boxed beef market, along with the confidence that’s prevailing throughout the futures market, may be the backing that the cash cattle market has needed to demand higher prices,” ShayLe Stewart, DTN livestock analyst, wrote in the midday comments. “Thus far, the market has yet to see any trade develop as packers haven’t offered up any bids, and the only asking prices noted at this time are in the South at $126-plus.”
The national weekly direct beef type price distribution for the week of Oct. 18 to Oct. 25 was the following on a live basis:
• Negotiated purchases: $124.63.
• Formula net purchases: $126.27.
• Forward contract net purchases: $127.70.
• Negotiated grid net purchases: $126.62.
On a dressed basis:
• Negotiated purchases: $195.87.
• Formula net purchases: $200.34.
• Forward contract net purchases: $195.57.
• Negotiated grid net purchases: $199.14.
Slaughter for the day is projected to be 122,000 head, 1,000 above last week.
“If the fed cattle beef processing industry can consistently improve hourly slaughter rates, then the cattle feeding industry would have the opportunity to finally get fully cleaned up on the front-end, which equals leverage and higher cash fed cattle prices,” Cassie Fish, market analyst for The Beef, wrote. “There is no other fundamental factor of greater importance than this single issue.”
Boxed beef prices were mixed on 136 loads, with the Choice cutout up $1.72 to $284.76 and the Select cutout down 65 cents to $262.54.
Feeder cattle
Feeder cattle also traded higher today, with the October contract up 35 cents to $155.97 and the November contract up $1.30 to $159.77. The CME Feeder Cattle Index was up 16 cents to $155.50.
“If the live cattle market can maintain its current strength into the later part of the week and demand higher cash cattle prices, the feeder cattle market may be able to rally upon its momentum,” Stewart wrote.
Corn contracts were higher following being unchanged starting the week. The December and March contracts were up 5 cents a bushel to $5.43 and $5.52, respectively.
South Dakota: Sioux Falls Regional Livestock in Worthing sold 2,286 head on Monday. Compared to last week, feeder steers 600-650 lbs. sold $10-12 lower, 700-750 lbs. were $3-5 higher and 850-900 lbs. sold $2-5 higher. Heifers were unevenly steady in a very light test, except 850-900 lbs., which were steady to $2 higher. Benchmark steers averaging 770 lbs. sold between $151.75-154, averaging $152.34.
Nebraska: Tri-State Livestock in McCook sold 1,785 head on Monday. Compared to the previous auction, steers were steady to $9 higher, and heifers were steady to $3 higher on good demand. A group of steers averaging 659 lbs. sold between $149.50-150 and averaged $149.90.
New Mexico: Roswell Livestock in Roswell sold 1,600 head on Monday. A group of steers averaging 690 lbs. sold for $138.50. There is no comparison to last week due to the reporter’s illness.
Crop progress
USDA released the Crop Progress report showing harvest pushed forward with drier conditions most of the week. Corn harvest jumped 14 percent to 66 percent complete, 4 percentage points behind last year’s pace but 13 percentage points ahead of the five-year average of 53 percent.
Winter wheat planted is at 80 percent, and 46 percent rated good to excellent, the same as the five-year average.
Montana leads the pack with the largest topsoil moisture deficit at 96 percent short to very short. Washington state showed a big improvement of 9 points to 88 percent short to very short this week due to recent moisture. That number is expected to improve even more by next week, with the current round of storm systems dropping much-needed moisture throughout the Pacific coastal states.
Pasture and range conditions will be published on Thursday with the Drought Monitor. — Charles Wallace, WLJ editor
