Tuesday markets
Cattle futures closed triple digits lower as traders were looking for fundamental support.
“CME cattle futures are getting pounded today right out of the gate, pressing oversold technical indicators to the lowest levels seen since the major low last November,” Cassie Fish, market analyst, wrote in The Beef. “Cattle futures took out last Friday’s low early in the session and quickly made new lows for the move.”
Live cattle futures closed triple digits lower, with the August contract down $3.30 to $231.42 and the October contract $2.97 lower to $227.65.
Cash trade was light, with 2,300 head sold for $380-385. On the formula side, 22,200 head averaging 953 lbs. sold for an average of $407.77.
“With the continued weakness in the complex, it’s likely this week’s cash market will trade lower too,” ShayLe Stewart, DTN livestock analyst, wrote in her midday comments. “No bids are on the table at this point, but asking prices are noted at $248 in Texas. Otherwise, the cash market remains quiet.”
The national weekly direct beef type price distribution for the week of July 6-13 was the following on a live basis:
• Negotiated purchases: $248.18.
• Formula net purchases: $260.52.
• Forward contract net purchases: $245.93.
• Negotiated grid net purchases: $265.82.
On a dressed basis:
• Negotiated purchases: $391.63.
• Formula net purchases: $409.87.
• Forward contract net purchases: $381.82.
• Negotiated grid net purchases: $408.26.
Today’s slaughter is estimated to be 111,000 head, 1,000 head above the previous week.
Boxed beef prices were lower on 90 loads, with the Choice cutout down $1.66 to $373.95 and the Select cutout 76 cents lower to $364.41.
“Plus there is the continued seasonal decline in the boxed beef cutout value,” Fish wrote. “Choice boxes were down $7/cwt yesterday afternoon, led by $35/cwt lower rib. A July cutout break coming off the Q2 highs is normal, though this one is getting a lot of attention. The cutout is the lowest it’s been since Q1, also not unusual for July, but still above the $360 to $370 support, printing this morning at $375.60.”
Feeder cattle
Feeder cattle futures also closed triple digits lower, with the August contract down $5.55 to $348.80 and the September contract $5.97 lower to $344.85.
“The feeder cattle contracts are also trading lower as traders simply don’t have a leg to confidently stand on right now,” Stewart wrote. “With there yet to be any test in the fed cash cattle market, lower tones seen in sale barns across the U.S., and the live cattle futures trading lower, it’s only logical the feeder cattle contracts would trade lower too.”
The CME Feeder Cattle Index was up $2.10 to $372.52.
Corn futures closed lower, with the July contract 4 cents lower to $4.33 and the September contract 2 cents lower to $4.38.
New Mexico: Roswell Livestock in Roswell sold 743 head on Monday. Compared to the last auction two weeks ago, steer calves sold lower while feeder steers had no comparable sales, but a steady trend was evident. Feeder heifers sold lower, and heifer calves sold higher, except 450-500 lbs. sold $10-12 lower. Feeder heifers sold lower. A group of benchmark steers averaging 719 lbs. sold for $334-350, averaging $338.77.
Texas: Giddings Livestock in Giddings sold 1,547 head on Monday. Compared to the previous auction two weeks ago, feeder steers sold $10-15 lower. Feeder heifers were down $12-16. A group of benchmark steers averaging 715 lbs. sold for $355-378, averaging $363.08. — Charles Wallace, WLJ contributing editor
