Tuesday markets
Cattle futures traded to their highest since mid-May in the midday and then reversed course, closing lower.
“Since the futures market topped on May 14, two things have been true,” wrote Cassie Fish, market analyst, in The Beef. “One, no matter how dramatically the packer reduces production schedules, cash fed cattle prices remain on fire. And two, the same dramatic fed cattle harvest cuts taking production down 5% from a year ago to levels not seen since 2015, did not result in boxed beef prices correspondingly catching fire. Rally, yes, boxed beef prices rose $6/cwt since May 22, but it’s a pittance compared to cash cattle prices. Unprecedented.”
Live cattle futures closed lower, with the June contract down 57 cents to $215.97 and the August contract down $1.25 to $209.75.
Cash trade was light, with only 210 head sold. On the formula side, 35,000 head averaging 907 lbs. sold for an average of $358.45.
The national weekly direct beef type price distribution for the week of May 26 to June 2 was the following on a live basis:
• Negotiated purchases: $230.93.
• Formula net purchases: $227.17.
• Forward contract net purchases: $204.95.
• Negotiated grid net purchases: $228.21.
On a dressed basis:
• Negotiated purchases: $368.56.
• Formula net purchases: $357.71.
• Forward contract net purchases: $315.88.
• Negotiated grid net purchases: $358.02.
Today’s slaughter is estimated to be 121,000 head, 7,000 head above the previous week.
Boxed beef prices were lower on 115 loads, with the Choice cutout down 56 cents to $365.44 and the Select cutout down $1.59 to $356.52.
Feeder cattle
Feeder cattle futures also closed lower, with the August contract down 52 cents to $301.22 and the September contract down 47 cents to $300.42.
The CME Feeder Cattle Index was up $1.83 to $301.13.
Corn futures closed slightly higher, with the July contract up a fraction to $4.38 and the September contract up 2 cents to $4.23.
Nebraska: Tri-State Livestock in McCook sold 620 head on Monday. There were not enough sales for an accurate comparison. A group of steers averaging 661 lbs. sold for $330.
New Mexico: Roswell Livestock in Roswell sold 693 head on Monday. Compared to the last auction, steer calves 450-500 lbs. sold $20 lower and 500-600 lbs. were $15-18 higher. Feeder steer yearlings had insufficient numbers to compare. Heifer calves 350-400 lbs. sold $10 lower, while 400-450 lbs. were $7 higher and 450-550 lbs. sold $3-5 lower. Feeder heifers 600-650 lbs. sold steady. A group of steers averaging 768 lbs. sold for $317. — Charles Wallace, WLJ contributing editor
