Tuesday markets
Cattle futures came under pressure today as traders weighed whether the market is topping out or simply undergoing another correction following yesterday’s rally.
“Traders’ concerns about the livestock complex being overbought and over-extended have resurfaced today as all three of the livestock markets are trading lower into Tuesday’s noon hour,” ShayLe Stewart, DTN livestock analyst, wrote in her midday comments.
Live cattle futures closed triple digits lower, with the June contract down $3.77 to $223.25 and the August contract down $4.90 to $210.65.
Cash trade was light, with only 298 head sold. On the formula side, 25,300 head averaging 899 lbs. sold for an average of $373.26.
“But the real question that the week has yet to answer is: If the market is indeed able to receive fundamental support in the form of stronger cash prices and continued stronger boxed beef prices, will it make a difference for the futures complex?” Stewart said. “Personally, I’m not certain that it will, as traders seem committed to siding with the bears in the market, but there’s a chance that if fundamental support does develop, it will at least help hold the market closer to steady as opposed to letting it trade multiple dollars lower.”
The national weekly direct beef type price distribution for the week of June 9-16 was the following on a live basis:
• Negotiated purchases: $238.52.
• Formula net purchases: $233.20.
• Forward contract net purchases: $199.32.
• Negotiated grid net purchases: $234.84.
On a dressed basis:
• Negotiated purchases: $379.90.
• Formula net purchases: $366.59.
• Forward contract net purchases: $318.
• Negotiated grid net purchases: $365.38.
Today’s slaughter is estimated to be 118,000 head, 1,000 head below the previous week.
Boxed beef prices were higher on 105 loads, with the Choice cutout up $4.40 to $386.51 and the Select cutout up $5.07 to $372.54.
Feeder cattle
Feeder cattle futures lost over $6, with the August contract down $6.87 to $303.35 and the September contract down $6.67 to $302.90.
The CME Feeder Cattle Index was down $3.21 to $313.89.
Corn futures closed mixed, with the July contract down 3 cents to $4.31 and the September contract up 4 cents to $4.23.
New Mexico: Roswell Livestock in Roswell sold 466 head on Monday. Compared to the last auction, steer calves 400-450 lbs. sold $2 lower and feeder steers 700-750 lbs. were $2 lower. Heifer calves 450-500 lbs. sold $11 lower, 550-600 lbs. were $13 higher, while feeder heifers 700-750 lbs. sold $18-20 higher. A group of steers averaging 728 lbs. sold for $322-329, averaging $328.32.
South Dakota: Sioux Falls Regional in Worthing sold 6,632 head on Monday. Compared to the last auction two weeks ago, feeder steers and heifers sold $7-10 higher. Benchmark steers averaging 735 lbs. sold for $332-357, averaging $343.51. — Charles Wallace, WLJ contributing editor
