Tuesday markets
Cattle futures traded on both sides today as traders weigh record-high prices and uncertainty in the fed cash market, signaling a potential correction amid overbought conditions.
“Some traders’ skepticism comes from the sheer fact that the market is already trading at an all-time high,” ShayLe Stewart, DTN livestock analyst, wrote in her midday comments. “Also, not to mention the fact that later this week the monthly Cattle on Feed report will be unveiled and it’s yet to be seen what this week’s fed cash cattle market is going to do. So, all that being said, deep down it seems as though traders want to continue to support the complex, but there are plenty of variables up in the air right now and nor down they don’t want to overextend the market.”
After a volatile trading session, live cattle futures closed lower. The August contract lost 25 cents to close at $224.97, and the October contract was down 50 cents to $221.12.
Cash trade was minimal, with only 12 head sold—not enough for a market trend.
“It’s no surprise that there has been very little negotiated fed cattle trade yet this week,” wrote Cassie Fish, market analyst, in The Beef. “Packers are attempting to hold margins together and are determined not to pay up this week on the heels of the second and third highest cattle costs in history.”
The national weekly direct beef type price distribution for the week of July 14-21 was the following on a live basis:
• Negotiated purchases: $238.50.
• Formula net purchases: $233.83.
• Forward contract net purchases: $204.11.
• Negotiated grid net purchases: $234.25.
On a dressed basis:
• Negotiated purchases: $379.48.
• Formula net purchases: $366.89.
• Forward contract net purchases: $318.48.
• Negotiated grid net purchases: $374.22.
Today’s slaughter is estimated to be 112,000 head, 6,000 head below the previous week.
Boxed beef prices were mixed on 136 loads, with the Choice cutout rising 43 cents to $372.50 and the Select cutout falling $2.11 to $347.94.
Feeder cattle
Feeder cattle futures closed higher, with the August contract 67 cents higher to $328.27 and the September contract up 87 cents to close at $328.57.
The CME Feeder Cattle Index gained $3.52 to $325.80.
Corn futures fell despite 74% of this year’s crop rated as good to excellent. The September and December contracts fell 4 cents to $3.99 and $4.18, respectively.
Nebraska: Tri-State Livestock in McCook sold 1,531 head on Monday. An accurate comparison could not be made due to a lack of recent sales. Benchmark steers averaging 769 lbs. sold for $352. — Charles Wallace, WLJ contributing editor
