Tuesday markets
Feeder cattle moved higher today, reversing Monday’s response to the placement numbers from the Cattle on Feed Report, while live cattle futures extended yesterday’s losses.
The October live cattle contract was lower 40 cents to $122, and the December contract was down 30 cents to $127.50.
“The lack of market movement Monday and Tuesday seem to indicate traders have already adjusted to increased cattle inventory levels in the last six weeks,” Rick Kment, DTN contributing analyst, wrote in the midday comments. “The aggressive market pressure in nearby contracts based on the uncertainty of long-term demand and exiting of noncommercial traders points to market prices at or near support levels.”
Cash trade was light, with 2,481 head selling for $122. Dressed steer sold for $196. On the formula side, 20,200 head averaging 873 lbs. sold for $204.09. Negotiated cash volume for the week ending Sept. 26 was 63,112 head.
The national weekly direct beef type price distribution for the week of Sept. 20 to Sept. 27 was the following on a live basis:
• Negotiated purchases: $123.69.
• Formula net purchases: $127.14.
• Forward contract net purchases: $127.57.
• Negotiated grid net purchases: $128.55.
On a dressed basis:
• Negotiated purchases: $196.43.
• Formula net purchases: $202.67.
• Forward contract net purchases: $197.55.
• Negotiated grid net purchases: $203.43.
Slaughter for the day is projected to be 121,000 head, 1,000 below last week and 3,000 above last year.
Boxed beef prices continue to decline on 155 loads, with the Choice cutout down $1.14 to $301.56 and the Select cutout down 3 cents to $274.35.
Yesterday, the USDA released its Weekly Comprehensive Boxed Beef report, showing exports are on pace to be a record year for 2021, according to Cassie Fish, market analyst for The Beef. Fish also wrote the report shows that retail beef demand has not dampened prices, domestically and globally.
“So 2021 will likely establish three historical records,” Fish said. “The U.S. beef industry will produce more beef and at the same time record the highest annual wholesale beef price and the highest annual retail beef price in history.”
Unfortunately, Fish notes this has not translated to higher cattle prices for producers.
Feeder cattle
Feeder cattle also gained ground on lower corn futures. The September contract was up 15 cents to $154.40, and the October contract was higher $1.35 to $156.12. The CME Feeder Cattle Index was down 6 cents to $154.81.
“It is important to remember the reports deal with historical data,” Kment wrote. “In this situation, placement levels are as of Sept. 1, nearly a month ago. It is important to keep things in perspective and understand that placements in August were higher than nearly anyone thought, but current market situations also point to steady demand for feeder cattle as more cattle are sold into feedyards due to the seasonal cycle. It will be interesting to compare Sept. 1 data with Oct. 1 data and determine if this trend of increased placements continues through the entire season.”
Corn futures took back some of yesterday’s gains, with the December contract down 7 cents to $5.32 and the March contract down 6 cents to $5.40 a bushel.
South Dakota: Sioux Falls Regional Cattle in Worthing sold 980 head on Monday. Compared to last week, feeder steers and heifers sold unevenly steady this week. Benchmark steers averaging 731 lbs. sold between $144-150 and averaged $146.34.
Nebraska: Tri-State Livestock in McCook sold 2,525 head on Monday. Compared to the previous auction, steers and heifers were steady to $8 higher. Benchmark steers averaging 737 lbs. sold for $165.
New Mexico: Roswell Livestock in Roswell sold 926 head on Monday. Compared to last week, steer calves were uneven, with instances of $1 lower to instances of $5-8 higher on 500-600 lbs. Feeders and calves over 600 lbs. sold $6 higher. Heifer calves under 600 lbs. were steady to $3 higher, over 600 lbs. sold $3 higher on comparable quotes. A group of steers averaging 627 lbs. sold between $156-165 and averaged $158.74.
Crop Progress
Corn harvest has progressed to 18 percent complete, with Texas harvesting the most at 83 percent of its crop out of the field compared to its five-year average of 69 percent. The national corn condition rating for the remaining unharvested corn acres shows 59 percent good-to-excellent, with Nebraska experiencing a 2 percent increase in quality to 70 percent, and Illinois went down 2 percent to 72 percent good-to-excellent.
Topsoil moisture conditions continue to show Montana with the worst rating of 96 percent of its acreage rated short to very short, while Washington is right behind it with a rating of 95 percent.
Pasture and range conditions will be published on Thursday with the drought monitor. — Charles Wallace, WLJ editor
