Thursday markets
Cattle futures are on a winning streak, with December live cattle logging ten straight higher closes and feeders rallying as traders are waiting for cash trade to develop.
“With the anticipation that fed cash cattle prices will trade higher again this week, traders are continuing to push the live cattle contracts higher into Thursday’s noon hour,” ShayLe Stewart, DTN livestock analyst, wrote in her midday comments. “Again, today it’s the market’s deferred contracts that are seeing the biggest day-over-day gains as everyone in the industry is clearly recognizing that although supplies are thin now, they’re going to become even thinner before the cowherd is rebuilt.”
Live cattle futures climbed higher, with the October contract $1.77 higher to close at $243.95 and the December contract up $1.10 to $247.87.
Cash trade was moderate with 4,272 head sold. Live steers sold for $238-240, and dressed steers sold for $372-373.
On the formula side, 25,900 head averaging 932 lbs. sold for an average of $371.61.
“Pretty much everything else is taking a back seat today and the anticipation for this week’s cash trade is palpable,” Cassie Fish, market analyst, wrote in The Beef. “Packers need inventory and know they’ll be paying dollars higher. That’s just the way it goes in a bull market coming off a low. It’s generally impossible to own enough inventory when a market turns.”
Today’s slaughter is estimated to be 118,000 head, 7,000 head above the prior week.
USDA’s Comprehensive Fed Cattle Weekly report showed carcass weights were 943.9 lbs., up 8 lbs. from the prior week. The quality grade was down 0.1% from the prior week to 83.2%.
Boxed beef prices were lower on 99 loads, with the Choice cutout 37 cents lower at $366.11 and the Select cutout down 23 cents at $348.93.
“Boxed beef prices are struggling as they come off their bottom, losing a dollar at midday,” Fish continued. “This is normal, boxes following and futures, then cash leading, but it’s a reminder of the wearisome margin challenge that packers are facing.”
Feeder cattle
Feeder cattle futures closed mixed, with the October contract 5 cents lower to $379.67 and the November contract 27 cents higher to close at $380.95.
The CME Feeder Cattle Index was $4.02 higher to $373.02.
Corn futures were also in the green, with the December contract up 5 cents to $4.21 and the March contract 3 cents higher to $4.35.
Kansas: Winter Livestock in Dodge City sold 3,147 head on Wednesday. Compared to the previous auction, steer and heifer calves sold with a higher to sharply higher undertone. Yearling steers sold steady to $10 higher, while yearling heifers sold $15-20 higher. Benchmark steers averaging 729 lbs. sold for $383-399 and averaged $395.21.
Nebraska: Bassett Livestock in Bassett sold 3,660 head on Wednesday. An accurate comparison could not be made due to a limited amount of sales at the previous auction. Benchmark steers averaging 786 lbs. sold for $394-409 and averaged $398.30.
Oklahoma: OKC West in El Reno sold 6,171 head on Wednesday. Compared to the previous auction, feeder steers sold $6-12 higher. Feeder heifers over 750lbs. sold $5-8 higher, and under 750 lbs. traded $11-15 higher. Benchmark steers averaging 721 lbs. sold for $390-411 and averaged $407.52. — Charles Wallace, WLJ contributing editor
