Tuesday markets
Traders put the brakes on the rally seen over the past few days, with futures closing mixed.
“CME cattle futures have rallied the past 10 days, pushing back to the highs or into new highs and pushing into overbought technical territory,” Cassie Fish, market analyst, wrote for The Beef. “So today’s lower action isn’t raising any eyebrows and is being viewed as a healthy correction.”
Live cattle futures were mixed, with the April contract up 35 cents to $205.37 and the June contract down 7 cents to $201.
Cash trade was light, with 177 head sold—not enough for a market trend.
On the formula side, 19,600 head averaging 900 lbs. sold for an average of $315.76.
The national weekly direct beef type price distribution for the week of March 10-17 was the following on a live basis:
• Negotiated purchases: $205.15.
• Formula net purchases: $201.81.
• Forward contract net purchases: $194.04.
• Negotiated grid net purchases: $202.11.
On a dressed basis:
• Negotiated purchases: $324.61.
• Formula net purchases: $316.95.
• Forward contract net purchases: $309.11.
• Negotiated grid net purchases: $322.17.
Today’s slaughter is estimated to be 123,000 head, 1,000 head lower than a week earlier.
Boxed beef prices were higher on 109 loads, with the Choice cutout up $2.16 to $323.32 and the Select cutout up $1.33 to $309.23.
Analysts released pre-report estimates for Friday’s Cattle on Feed report release. The consensus is that cattle on feed will be 98.2% as of March 1 for feedlots of 1,000 head or greater. Placements in February are estimated to be 85.6%, and marketings for February are predicted at 91.8%.
Feeder cattle
Front-end feeder cattle futures closed slightly higher, with the March and April contracts up 35 cents to $284.97 and $284.55, respectively.
The CME Feeder Cattle Index was up 55 cents to $283.27.
“Today’s lower/holding tone seems to be stemming from the fact that traders want to ensure that fed cash cattle prices are indeed going to trade higher before they encourage the contracts to trade higher,” ShayLe Stewart, DTN livestock analyst, wrote in her midday comments. “We can’t lose sight of the fact that the contracts are either trading at contract highs or steady with the highs made in January.”
Corn futures were lower, with the March and May contracts losing 2 cents to $4.58 and $4.68, respectively.
Nebraska: Tri-State Livestock in McCook sold 842 head on Monday. Compared to the previous auction, steers less than 600 lbs. sold $10 higher and over 600 lbs. sold $2-8 higher. Heifers less than 650 lbs. sold $10 higher and over 650 lbs. sold $2-4 higher, all on a light test of the market. A group of steers averaging 710 lbs. sold for $312.
New Mexico: Roswell Livestock in Roswell sold 808 head on Monday. Compared to the last auction, steer and heifer calves sold $8-15 higher. Feeder steers sold $3-5 higher, while feeder heifers were $10-15 higher. A group of steers averaging 716 lbs. sold for $288. — Charles Wallace, WLJ contributing editor
