Tuesday markets
Cattle futures tumbled Tuesday after the USDA announced a phased reopening of the Mexican border for cattle imports, sparking broad losses across the livestock complex.
“Although the live cattle contracts aren’t reacting as drastically as the feeder cattle contracts are to the USDA’s announcement that some Mexican cattle imports will resume as early as July 5,” ShayLe Stewart, DTN livestock analyst, wrote in her midday comments. “The market is still trading lower thanks to the bearish news.”
Live cattle futures were lower, with the August contract down $3.12 to $210.75 and the October contract down $2.37 to $207.80.
Cash trade was light, with 327 head sold for $224. On the formula side, 28,300 head averaging 913 lbs. sold for an average of $370.24.
“Based on the number of fed cattle purchased by packers last week combined with formulas and forward contracts, packers would appear to be in need of buying bigger volume this week in preparation for next week’s full production schedule,” wrote Cassie Fish, market analyst in The Beef. “Cash has already lost $9/cwt the past two weeks. With July 4th on a Friday, expect things to get underway shortly. A very few $220 bids have been floated in the South, which is $3-4 lower than last week.”
The national weekly direct beef type price distribution for the week of June 23-30 was the following on a live basis:
• Negotiated purchases: $230.38.
• Formula net purchases: $237.19.
• Forward contract net purchases: $203.63.
• Negotiated grid net purchases: $240.04.
On a dressed basis:
• Negotiated purchases: $369.38.
• Formula net purchases: $374.60.
• Forward contract net purchases: $320.76.
• Negotiated grid net purchases: $374.37.
Today’s slaughter is estimated to be 120,000 head, 2,000 head above the previous week.
Boxed beef prices were mixed on 108 loads, with the Choice cutout up 4 cents to $395.60 and the Select cutout down $4.04 to $380.06.
Feeder cattle
Feeder cattle futures were over $4 lower, with the August contract down $4.65 to $306.02 and the September contract down $4.97 to $305.65.
The CME Feeder Cattle Index was up $2.10 to $314.07.
“The biggest concern that cattle producers have is how many cattle are now going to be allowed to cross the border?” Stewart wrote. “And how is that going to affect domestic prices? Unfortunately, time will have to answer those questions, but today’s negative downturn is a psychological reaction to the announcement.”
Corn futures closed lower, with the July contract down a fraction to $4.20 and the September contract down 3 cents to $4.06.
Iowa: Russell Livestock in Russell sold 1,627 head on Monday. Due to a lack of recent auctions, an accurate comparison could not be made. Benchmark steers averaging 721 lbs. sold for $312-350, averaging $341.58.
Texas: Giddings Livestock in Giddings sold 950 ahead on Monday. Compared to the last auction, feeder steers were fully steady to $4 higher. Feeder heifers were fully steady to $6 higher. Benchmark steers averaging 709 lbs. sold for $300-328, averaging $310.68. — Charles Wallace, WLJ contributing editor
