Thursday markets
As the market closed for the month and the quarter, there was a weaker tone today for the entire cattle complex. USDA released the grain stock report showing old crop corn stocks down 36 percent from a year ago.
“The previous pressure in feeder cattle markets and continued softness in beef values earlier in the week have taken a toll on live cattle futures, with nearby contracts testing and breaking through short-term support levels,” Rick Kment, DTN contributing analyst, wrote in the midday comments.
Live cattle futures were sharply lower, with the October contract down $1.20 to $120.57 and the December contract down $1.32 to $125.72.
Cash trade was light compared to Wednesday, with 9,894 head selling between $121-124, averaging $122.65. Dressed steers sold between $192-196, averaging $194.53. On Thursday, negotiated cash trade was limited on light demand in all major feeding regions. There were a few live purchases in the western Corn Belt at $122, but not enough in any region for a full market trend. On the formula side, 26,900 head averaging 874 lbs. sold for $203.73.
Slaughter for the day is projected to be 121,000 head, 7,000 above last week, but still below last week’s pace. The weekly total so far is 473,000 head compared to last week’s 477,000 head.
USDA released the actual slaughter numbers for the week ending Sept. 18 at 649,602 head. Total beef production was 537.4 million lbs. Steer carcasses reached 912 lbs., up 3 lbs. from the prior week and down 8 lbs. from a year ago.
Boxed beef prices were lower on 129 loads, with the Choice cutout lower $2.35 to $294.98 and the Select cutout down $2.46 to $269.32.
Export sales for the week ending Sept. 23 show net sales of 16,100 metric tons (mt), up 2 percent from the previous week and 9 percent from the prior four-week average. Exports of 18,500 mt were up 2 percent from the previous week and 3 percent from the prior four-week average. The destinations were primarily to Japan (5,500 mt), South Korea (4,900 mt), China (3,500 mt), Taiwan (1,100 mt) and Mexico (1,000 mt).
“Although weekly sales are still well above August lows, the lack of late-year growth continues to add further concern to the entire beef market,” Kment wrote.
Feeder cattle
Feeder cattle futures were lower with very light trading on the September contract, which was lower 35 cents, closing at $153.92. The October contract was lower $2.07 to $152.55, and the November contract was down $2.37 to $152.90. The CME Feeder Cattle Index was down 88 cents to $153.78.
“October contracts have broken through June lows during morning trade, which has been a significant support level the market has been closely watching over the last few weeks,” Kment said. “October feeder cattle futures have now fallen over $17 per cwt from contract highs set during the third week of August. Technically speaking, the next major support level is May lows at $147 per cwt, creating growing uncertainty of buyer support over the near future.”
Corn futures were slightly lower, with the December contract down 2 cents to $5.36 and the March contract down 2 cents to $5.44 a bushel.
Corn stocks for the old crop were reported at 1.24 billion bushels, down 36 percent from the same period a year ago. Corn silage was revised down by 54,000 tons as well. Planted area for the 2020-21 crop was also revised to 90.7 million acres, and the area harvested for grain was revised to 82.3 million acres. The area harvested for silage was revised to 6.71 million acres. The 2020-21 yield was revised to 171.4 bushels per acre, down 0.6 bushels per acre from the previous estimate.
New Mexico: Clovis Livestock in Clovis sold 2,864 head on Wednesday. Compared to the previous auction, steer calves under 600 lbs. were mixed. Calves and feeders over 600 lbs. sold $2 lower, and a few 700-750 lbs. were $5-7 lower. Heifer calves under 600 lbs. were steady to $2 lower, except 300-400 lbs., which had instances $10 lower. A group of steers averaging 708 lbs. sold between $140-145 and averaged $141.75.
Oklahoma: OKC West in El Reno sold 5,740 head on Wednesday. Compared to last week, feeder steers sold $2-3 higher. Feeder heifers traded $2-4 higher. Benchmark steers averaging 778 lbs. sold between $154-158.50, averaging $156.73.
South Dakota: Hub City Livestock in Aberdeen sold 1,774 head on Wednesday. Compared to last week, there were different weight classes, so an accurate price trend cannot be established. There was good to very good demand for yearlings, with best demand seen for those off grass. Benchmark steers 714 lbs. sold between $160-167.25 and averaged $162.97. — Charles Wallace, WLJ editor
