Thursday markets
Markets reacted strongly to news of the first confirmed U.S. case of New World screwworm in Texas, sending live cattle and feeder cattle contracts sharply higher.
Live cattle futures closed higher, with the June contract up $2.55 to $249.17 and the August contract $3.67 higher to $241.52.
“Who would have ever thought after hearing about the first positive case of New World screwworm being detected in the U.S.—the first time in 60 years—that the cattle complex would trade substantially higher?” ShayLe Stewart, DTN livestock analyst, wrote in her midday comments. “I think this turn of events really needs to be a reflection point as to how the cattle complex operates, trades and digests information.”
Stewart continued that recent market reactions to both the New World screwworm situation and last month’s Cattle on Feed report highlight how futures markets increasingly respond to headlines and expectations rather than waiting for confirmed information. She noted traders often sell on rumors and uncertainty, then buy once the facts become known, reflecting the anticipatory nature of today’s cattle markets.
“Or as the old saying goes, sell the rumor, buy the fact,” Stewart concluded.
Cash trade was moderate, with 4,272 head sold. Live steers sold for $256-258, and dressed steers sold for $405.
On the formula side, 23,800 head averaging 943 lbs. sold for an average of $409.58.
Today’s slaughter is estimated to be 108,000 head, 2,000 head lower than last week.
Actual slaughter for the week ending May 23 was 535,759 head. The average steer dressed weight was 978 lbs., 2 lbs. higher than the previous week.
Boxed beef prices were lower on 128 loads, with the Choice cutout down $3.20 to $392.66 and the Select cutout down $1.39 to $383.04.
Feeder cattle
Feeder cattle futures closed limit higher, with the August and September contracts $10.75 higher to $353.37 and $350.07, respectively.
“Aside from wanting to remain in alignment with the live cattle complex, the feeder cattle market may also be trading higher as the finding of NWS in the U.S. likely means the border will remain closed for the distant future,” Stewart wrote.
The CME Feeder Cattle Index was 12 cents lower to $364.14.
Corn futures closed lower, with the July and September contracts down 7 cents to $4.24 and $4.32, respectively.
New Mexico: Clovis Livestock in Clovis sold 781 head on Wednesday. Compared to the last auction, steer calves 450-550 lbs. sold steady to higher, and 550-600 lbs. were $10 lower. Feeder steers sold uneven according to condition and fill, but a higher market was evident. Heifer calves 500-600 lbs. sold $10-13 higher, and feeder heifers 750-800 lbs. that were guaranteed open sold $15 higher. Benchmark steers averaging 712 lbs. sold for $352-355, averaging $354.11.
Oklahoma: OKC West in El Reno sold 9,446 head on Wednesday. Compared to the last auction, feeder steers sold $10-15 lower. Feeder heifers traded steady to $6 lower. Steer and heifer calves sold $10-20 lower than the light test last week. Benchmark steers averaging 715 lbs. sold for $347.50-377.50, averaging $361.72.
South Dakota: Hub City Livestock in Aberdeen sold 5,427 head on Wednesday. Best test on steers 900 to 1,049 lbs. sold unevenly steady. Heifers were not well compared. Benchmark steers averaging 758 lbs. sold for $400-414.50, averaging $409.27. — Charles Wallace, WLJ contributing editor
