Friday markets
Cattle futures were mixed ahead of the Cattle on Feed report release.
The Cattle on Feed report, released after the markets closed, showed that feedlots with a capacity of 1,000 or more head totaled 11.2 million head on Sept. 1, 2021. The inventory was 1 percent below last year. This is the second highest Sept. 1 inventory since the series began in 1996. Placements in feedlots during August totaled 2.1 million head, 2 percent above 2020. Net placements were 2.05 million head. Marketings of fed cattle during August totaled 1.89 million head, slightly below 2020.
Live cattle futures closed lower, with the October contract down 30 cents to $122.92 and the December contract down 47 cents to $128.15.
Cash trade was light, with 1,653 head of 65-80 percent Choice selling for $122. Dressed steers sold between $193-194. On the formula side, 27,700 head averaging 887 lbs. sold for $199.84.
“Packers obviously have a lot of cattle around them in the form of various types of commitments,” Cassie Fish, market analyst, wrote for The Beef. “This puts the cash market seller at a frustrating disadvantage each week and right now, that’s playing out more in Nebraska and Iowa than anywhere. If it has felt like the cash market volume is smaller than any time in history—that would be correct. Year-to-date, more cattle harvested than ever before fell into the committed category.
“In the old days, big profits and growing beef demand would cause packers to run harder. In 2021, that is not the case. So sluggish kills combined with more committed cattle than ever before results in a persistent inability to clean up the front end. This is the market’s nemesis.”
Slaughter for Friday is expected to be 110,000 head—8,000 head below last week and 3,000 below last year. Saturday’s slaughter is projected to be 54,000 head, bringing the weekly total slaughter to 641,000 head.
Boxed beef prices continued their descent today on 104 loads, with the Choice cutout down $2.28 to $303.32 and the Select cutout down 46 cents to $274.53. The Choice/Select spread is $28.79.
USDA’s National Agricultural Statistics Service released the Livestock Slaughter report yesterday, showing beef production at 2.36 billion pounds—1 percent above the previous year. Cattle slaughter totaled 2.89 million head, up 3 percent from August 2020. The average live weight was down 11 lbs. from the previous year, at 1,354 lbs.
Feeder cattle
Feeder cattle were mixed, with the September contract down 27 cents to $154.62 and the October contract higher 50 cents to $157.35. The CME Feeder Cattle Index was down 45 cents to $154.04.
“Light to moderate pressure in corn and grain markets is limiting downside market shifts in feeder cattle compared to live cattle, although the move in outside markets is not enough to stimulate widespread buying at this point,” Rick Kment, DTN contributing analyst, wrote in the midday comments.
Corn futures closed moderately lower, with the December contract down 2 cents to $5.26 and the March contract also down 2 cents to $5.34 a bushel.
Montana: Billings Livestock in Billings sold 5,488 head on Thursday. Compared to the last auction, steer calves under 500 lbs. sold $8-12 higher, and steers over 500 lbs. were not well compared; however, higher undertones were noticed. Heifer calves all sold steady to $5 higher. Benchmark steers averaging 754 lbs. sold between $165-166.
South Dakota: Mitchell Livestock in Mitchell sold 2,477 head on Thursday. Compared to last week, there were very few steers again; therefore, a trend was not applicable. A steady to lower undertone was noted on steers. Heifers 750-850 lbs. were steady to $2 lower, and heifers 850-1,000 lbs. were $5-7 lower. Benchmark steers averaging 763 lbs. sold for $153.50.
Texas: Cattlemen’s Livestock in Dalhart sold 2,215 head on Thursday. Compared to the previous auction, steer and heifer calves under 600 lbs. were firm compared to limited receipts last week. Feeder steers and heifers over 600 lbs. were firm, with instances $1-2 higher than limited receipts last week. Benchmark steers averaging 757 lbs. sold between $158-160, averaging $159.86. — Charles Wallace, WLJ editor
