Tuesday markets
Support from stronger equity markets has cattle futures challenging the top of their recent trading range.
Live cattle futures closed sharply higher, with the June contract up $4.67 to $255.30 and the August contract $5.95 higher to $249.20.
“It’s a glorious day for the live cattle contracts as not only are the futures trading higher, the market is rallying aggressively above its 40-day moving average, which has been a challenging threshold over the last three weeks,” ShayLe Stewart, DTN livestock analyst, wrote in her midday comments.
Cash trade was light, with only 67 head sold. On the formula side, 20,600 head averaging 948 lbs. sold for an average of $408.12.
“Packers tried hard last week to cheapen their cattle costs, but the effort cost them inventory,” wrote Cassie Fish, market analyst, for The Beef. “With strong futures and less cattle around themselves, expect cash prices this week to be fully steady to higher. Fed cattle supplies remain in relatively tight hands and supplies aren’t expected to increase in a meaningful way this summer.”
The national weekly direct beef type price distribution for the week of June 8-15 was the following on a live basis:
• Negotiated purchases: $256.22.
• Formula net purchases: $261.05.
• Forward contract net purchases: $247.86.
• Negotiated grid net purchases: $264.17.
On a dressed basis:
• Negotiated purchases: $404.81.
• Formula net purchases: $409.09.
• Forward contract net purchases: $382.50.
• Negotiated grid net purchases: $409.85.
Today’s slaughter is estimated to be 109,000 head, the same as last week.
Boxed beef prices were higher on 95 loads, with the Choice cutout up $4.53 to $399.58 and the Select cutout 44 cents higher to $376.85.
Feeder cattle
Feeder cattle futures also closed higher, with the August contract up $5.32 to $366.87 and the September contract $5.75 higher to $365.27.
The CME Feeder Cattle Index was down $5.34 to $362.67.
Corn futures closed slightly lower, with the July contract down a penny to $4.13 and the September contract down a fraction to $4.22.
South Dakota: Sioux Falls Regional in Worthing sold 7,570 head on Monday. Compared to last week’s limited offering, feeder steers and heifers sold with higher undertones on very good demand. Benchmark steers averaging 782 lbs. sold for $377-409, averaging $389.63.
Texas: Giddings Livestock in Giddings sold 998 head on Monday. Compared to the last auction, feeder steers were $2-5 higher and feeder heifers were $3-6 higher. A group of steers averaging 718 lbs. sold for $355-370, averaging $364.91. — Charles Wallace, WLJ contributing editor
