Tuesday markets
The announcement of Brazilian beef shipments to China being halted due to atypical mad cow disease did not propel the market higher. Instead, lower grain futures dragged cattle futures lower.
Live cattle started the day higher but finished in the red. The October contract was down $1.05 to $123.75, and the December contract was lower $1.37 to $129.55.
The USDA reported no negotiated trade today. On the formula side, 39,800 head averaging 870 lbs. sold for $199.93. Last week’s negotiated cash volume was 61,531 head, with a live steer average price of $125.77.
“A few cattle traded Friday at prices steady with early week gains,” The Cattle Report said. “Sales in the South have been $123 to mostly $124, while Northern live sales are $125-130. Dressed prices were from $199 to $205, mainly at $204. Cattle in the South, especially Texas, were gaining on Northern premiums last week.”
There was a small amount of slaughter on Labor Day, 3,000 head, and Tuesday’s slaughter is expected to be 121,000 head. The estimated slaughter for the week ending Sept. 4 was 624,000 head—27,000 lower than the week ending Aug. 28 due to the holiday weekend.
“This week’s holiday-reduced slaughter is expected to be 580,000 head, or pretty normal for Labor Day,” Cassie Fish, market analyst for The Beef, wrote. “Boxed beef values are expected to continue to erode, and fed cattle prices this week could be defensive unless one or more packer offers support.”
Boxed beef prices were lower on 109 loads, with the Choice cutout down $1.23 to $335.19 and the Select cutout down $2.23 to $301.90.
As of WLJ press time, the National Weekly Direct Beef Type Price Distribution report was not released.
Feeder cattle
Feeder cattle futures continue to slide, with the September contract down $2.20 to $156.27 and the October contract down $2.42 to $160.05. The CME Feeder Index was down 57 cents to $157.17.
“As futures fall, awareness is increasing among those in the cattle feeding industry, trading community and analysts that the disparity between beef prices and beef demand versus cattle prices and cattle demand could be here to stay for the foreseeable future,” Fish wrote. “Many had believed that something at least resembling the past would return. Now that is being questioned.”
Corn futures were sharply lower, with the September contract down 12 cents to $4.95 and the December contract down 13 cents to $5.10 a bushel.
Iowa: Russell Livestock in Russell sold 5,111 head on Monday. Compared to the previous auction, steers over 600 lbs. sold $5-10 higher; steers under 600 lbs. were sharply higher compared with limited volume two weeks ago. Heifers sold $2-6 higher, with the largest gain in heifers under 700 lbs. Demand was good to very good, with many buyers attending their annual Labor Day and BBQ sale. Benchmark steers averaging 735 lbs. sold between $166.25-173.75, averaging $170.81. — Charles Wallace, WLJ editor
