Tuesday markets
The cattle complex traded substantially lower, as traders were cautious. Cash trade was inactive and will likely develop later in the week. Boxed beef prices were lower, though not by as much as yesterday’s losses.
Live cattle closed sharply lower, with the December contract down $1.67 to $151.55 and the February contract down $2.20 to $153.62.
“It’s a gloomy day throughout the live cattle complex as the market stomachs the fact that Monday’s Choice close was the lowest that the year has seen,” ShayLe Stewart, DTN livestock analyst, wrote in the midday comments. “Now, to be clear, it’s normal to see a downturn in boxed beef prices through December, but the real question for the market is: Where’s the actual bottom? It’s likely that the market will continue to face pushback in boxed beef prices throughout the week, which could wane negatively on the futures complex. Whether or not these weaker boxed beef prices have an effect on this week’s cash cattle market remains unknown.”
Cash trade was mostly inactive, with 1,056 head sold—not enough for a market trend.
On the formula side, 33,800 head averaging 885 lbs. sold for an average of $252.83.
The national weekly direct beef type price distribution for the week of Nov. 28 to Dec. 5 was the following on a live basis:
• Negotiated purchases: $156.47.
• Formula net purchases: $156.94.
• Forward contract net purchases: $157.02.
• Negotiated grid net purchases: $154.46.
On a dressed basis:
• Negotiated purchases: $248.05.
• Formula net purchases: $248.77.
• Forward contract net purchases: $235.74.
• Negotiated grid net purchases: $245.82.
Slaughter for today is expected to be 128,000 head, the same as last week.
“Falling box prices are signaling the end of the holiday season demand for beef and the beginning of smaller slaughter numbers leading into next year,” the Cattle Report wrote. “Smaller show lists, reduced and sometimes negative processing margins, and fewer cows will be the characteristics of the coming weeks as winter demand slows but supplies of live cattle shrink. Cattle owners will continue to press their leverage with declining numbers of fed cattle and asking prices are higher once again.”
Boxed beef closed lower on 147 loads, with the Choice cutout down 66 cents to $242.65 and the Select cutout down $1.97 to $219.14.
Feeder cattle
Feeder cattle also lost triple digits, with the January contract down $1.97 to $181.80 and the March contract down $2.22 to $184.15. The CME Feeder Cattle Index was up 39 cents to $178.53.
Corn contracts closed lower, with the December and March contracts down 3 cents a bushel to $6.25 and $6.37, respectively.
Iowa: Russell Livestock Feeder Cattle in Russell sold 2,001 head Monday. Compared to the last auction, steer and heifer prices were mixed. Prices for 450-500 lb. steers were $5.10 lower, while 500-550 lb. steers were $5.40 higher. Prices for 450-500 lb. heifers were $6.80 lower, while 500-550 lb. heifers were $2 higher. Benchmark steers averaging 782 lbs. sold between $170.50-181, averaging $180.44.
Nebraska: Tri-State Livestock Auction in McCook sold 1,750 head Monday. Compared to the last auction, steers were steady to $6 higher, and heifers were steady. Benchmark steers averaging 788 lbs. sold between $179-180 and averaged $179.68.
South Dakota: Sioux Falls Regional Cattle Auction in Worthing sold 3,724 head Monday. Compared to the previous auction, feeder steers sold steady to $5 higher, with instances of $13 higher. Steers under 500 lbs. sold steady to $3 lower. Feeder heifers sold $1-5 higher, with instances of $12 higher. Heifers 400-500 lbs. sold $1-5 lower. Benchmark steers averaging 740 lbs. sold between $185-196, averaging $187.56. — Charles Wallace, WLJ editor
