Thursday markets
Cattle futures extended their downward trend as traders reacted to a sharply lower cash trade.
“The cattle industry is pretty much in a state of shock this week as the cash fed cattle market comes apart at breakneck speed,” Cassie Fish, market analyst, wrote in The Beef. “Two weeks ago, cash traded at $255. Today, cash is trading at $238. Many cattle feeders are back on their heels and have been reluctant to hit bids, in disbelief at this dramatic turn of events. Not selling at lower money means clean up—moving this week’s showlist to the packer—has not been through, which in of itself is short-term negative for the market.”
Live cattle futures closed lower, with the August contract down $3.05 to $227.07 and the October contract $2.72 lower to $223.27.
Cash trade was moderate, with 9,779 head sold. Live steers sold for $233-240, and dressed steers sold between $370-375. On the formula side, 17,300 head averaging 929 lbs. Sold for an average of $396.98.
“Aside from some cash cattle trade developing in Kansas at $237-238, which is $10-11 lower than last week’s weighted average, the market is idle at this point elsewhere,” ShayLe Stewart, DTN livestock analyst, wrote in her midday comments. “There could be a few more sales noted throughout the week, but the vast majority of the week’s trade is likely done with. So far this week, Northern dressed cattle have traded at mostly $377-380, which is $12-15 lower than the previous week’s weighted average.”
Today’s slaughter is estimated to be 109,000 head, 3,000 head lower than the previous week.
Actual slaughter for the week ending July 4 was 461,645 head. The average steer dressed weight was 963 lbs., up 2 lbs. from a week earlier.
Boxed beef prices were lower on 139 loads, with the Choice cutout down $2.90 to $368.38 and the Select cutout $3.49 lower to $355.69.
“Now that packers have acquired leverage, cattle prices are falling and the historic packing industry losses have likely seen their worst,” Fish wrote. “The market is now moving into the phase of finding value, so that margins improve and fed cattle slaughter can increase and accommodate the increase in supply, albeit relatively small.”
Feeder cattle
Feeder cattle futures closed lower, with the August contract down $3.35 to $346.60 and the September contract $4.02 lower to $340.35.
The CME Feeder Cattle Index was down $1.25 to $369.07.
Corn futures closed lower, with the September contract down 6 cents to $4.41 and the December contract 5 cents lower to $4.64.
Kansas: Winter Livestock in Dodge City sold 545 head on Wednesday. There were not enough steers and heifers sold for an accurate market test. A group of benchmark steers averaging 700 lbs. sold for $383.50.
Nebraska: Huss Livestock in Kearney sold 1,070 head on Wednesday. Compared to the last auction two weeks ago, yearling steers over 800 lbs. sold steady to $10 lower on a thin test of the market, with too few comparable heifer offerings to establish a trend. A group of steers averaging 845 lbs. sold for $364-366.75, averaging $366.08.
Oklahoma: OKC West in El Reno sold 4,708 head on Wednesday. Compared to the last auction, feeder steers over 900 lbs. sold $6-10 lower, and under 900 lbs. traded $15-20 lower. Feeder heifers sold $10-15 lower. Benchmark steers averaging 757 lbs. sold for $361.50-375, averaging $363.55. — Charles Wallace, WLJ contributing editor
