Tuesday markets
Feeder cattle futures rallied behind yesterday’s gains, while live cattle futures closed the day mixed.
October live cattle were higher 20 cents to $122.82, and the December contract was lower 20 cents to $127.85.
“Traders are finally focusing on the fact that last week’s losses in both live cattle and feeder cattle futures were well overstated and are willing to step back into the market,” Rick Kment, DTN contributing analyst, wrote in the midday comments. “Given the current market condition, without further major disruptions in the industry, it is likely that seasonal lows have been set in the live cattle trade. But regaining the significant market losses seen during September will still be a challenge.”
Cash trade was moderate today, with 2,995 head selling for $122. Dressed steers sold for $193. USDA stated negotiated cash sales were mostly inactive with light demand—not enough purchases for a market trend. On the formula side, 19,100 head averaging 878 lbs. sold for $203.56.
The national weekly direct beef type price distribution for the week of Sept. 27 to Oct. 4 was the following on a live basis:
• Negotiated purchases: $122.69.
• Formula net purchases: $127.
• Forward contract net purchases: $127.84.
• Negotiated grid net purchases: $128.87.
On a dressed basis:
• Negotiated purchases: $195.20.
• Formula net purchases: $201.90.
• Forward contract net purchases: $197.14.
• Negotiated grid net purchases: $201.51.
Slaughter for today is projected to be 122,000 head, 5,000 head above last week.
“Packer margins are still tremendous, netting just over $800 per head last week,” Cassie Fish, market analyst for The Beef, said. “This week’s slaughter is expected to be an improvement over the last couple of weeks with estimates 650K to as high as 660K head. There is more plant maintenance scheduled for the next couple of weeks that will trim throughput again.”
Boxed beef prices were mixed today on 171 loads, with the Choice cutout down $1.47 to $287.71 and the Select cutout higher $2.62 to $267.78.
The Choice cutout is down $58.85, or 17.4 percent lower, from the pre-Labor Day market peak on August 23. Fish stated the downward trend in prices is attributable to “collapsing rib market and tumbling beef 50s value, 50s trading under $1 per pound for the first time since June. The rib primal bottomed this summer around $4 per pound, another full $1 per pound lower than today’s price.”
Feeder cattle
Feeder cattle developed further gains today, with the October contract up $1.10 to $156.10 and the November contract higher $1.85 to $156.87. The CME Feeder Cattle Index was up 26 cents to $152.79.
“November futures are moving back above $157 per cwt and have posted a $4.20 per cwt gain over last week’s lows, creating additional optimism that further buyer support will steadily move into the market at the current price range,” Kment said. “Feeder cattle futures are still not out of danger of follow-through liquidation, but the farther prices move away from recent support levels, the more confidence buyers will have to slowly step back into the market.”
Corn futures were lower today, with the December contract down 3 cents to $5.37 and the March contract down 3 cents to $5.46 a bushel.
New Mexico: Roswell Livestock in Roswell sold 1,310 head on Monday. Compared to the previous auction, there was not an accurate comparison on feeder steers and heifers or calves, but a lower undertone was noted due to very limited offerings of weaned calves. A group of steers averaging 656 lbs. sold between $140-147.50 and averaged $141.11. — Charles Wallace, WLJ editor
