Thursday markets
“Today’s sell-off has been very dramatic, especially considering there have been no ‘headlines,’” said Cassie Fish, market analyst, in The Beef. “Deferred live cattle contracts and feeder cattle contracts have taken out the April low. Selling begets selling. Fear begets fear.”
Live cattle futures nosedived over the day. The June contract lost $4.12 to close at $249.15, and the August contract lost $5.95 to close at $239.35.
“Wednesday afternoon the live cattle complex pulled back slightly, mildly uncomfortable by the market’s resistance,” wrote ShayLe Stewart, DTN livestock analyst, in her midday comments.
“However, at Thursday’s open, the market pulled back abruptly, as if someone had accidently put their hand on a red-hot burner, pulling back with sheer instinct and without hesitation,” she continued.
Cash trade through Thursday totaled about 30,000 head. Live steers sold from $258-261, and dressed steers sold from $408-412.
“Lower cattle costs ought to stop packer margin bleed and possibly signal margin improvement during what has been a slow wholesale beef market this May,” Fish said.
Slaughter for the day was estimated at 109,000 head, compared to 108,000 head a week earlier. Total slaughter for the week so far is about 427,000 head, on pace with the same time last week. Actual slaughter for the week ending May 9 totaled 525,175 head. Dressed steers averaged 985 lbs., 7 lbs. higher than a week earlier.
Boxed beef prices were lower on 109 loads. The Choice cutout lost $2.14 to close at $391.48, and the Select cutout lost $5.48 to close at $385.65.
“Wholesale boxed beef values are higher on the week but lower on the day and have been disappointing overall ahead of the Memorial Day holiday weekend,” Fish said.
Feeder cattle
Feeder cattle futures hit limit down on deferred contracts. The May contract lost $1.60 to close at $369.12, while the August contract lost $9.25 to close at $356.52 and the September contract lost $9.25 to close at $353.37.
“More than anything, the disconnect currently seen between the market’s fundamentals and the futures complex is nauseating,” Stewart said. “And, with the Cattle on Feed report expected to be bearish as well, plenty of bearishness has seeped into the market.”
The CME Feeder Cattle Index gained $2.98 to close at $372.44.
Corn futures closed lower, down 3 cents on the July contract to $4.62, and down 4 cents on the September contract to $4.68.
Kansas: Winter Livestock in Dodge City sold 1,397 head on Wednesday. Compared to a week earlier, there were not enough feeder steers 500-975 lbs. for a market test, but a lower trend was noted. Feeder heifers 500-950 lbs. sold $6-10 lower on a light test. Benchmark steers averaging 736 lbs. sold from $378-385, averaging $379.85. — Anna Miller Fortozo, WLJ managing editor
