Tuesday markets
Cattle futures closed mixed as traders await direction from the cash market.
Live cattle futures closed marginally higher, with the June contract up 2 cents to $213.67 and the August contract up 30 cents to $209.37.
USDA did not report cash trade as of WLJ press time.
“Despite last week’s monster 99k head negotiated fed cattle trade, about 3k head have already traded at steady money,” Cassie Fish, market analyst, wrote in The Beef. “Cattle feeders are confident cash will trade another $2 higher this week on top of the $13 gain the past three weeks.”
The national weekly direct beef type price distribution for the week of April 28 to May 5 was the following on a live basis:
• Negotiated purchases: $220.81.
• Formula net purchases: $216.32.
• Forward contract net purchases: $198.74.
• Negotiated grid net purchases: $220.
On a dressed basis:
• Negotiated purchases: $349.86.
• Formula net purchases: $340.18.
• Forward contract net purchases: $316.37.
• Negotiated grid net purchases: $338.55.
Today’s slaughter is estimated to be 121,000 head, 1,000 head below the previous week.
“The packing industry is under financial siege and is expected to maintain the smallest slaughter since 2015 again this week,” Fish wrote. “Estimates for this week are a repeat of 559k head up to 565k head. Either way, a slaughter below the historic 2015 slaughter level in the month of May, typically one of the larger slaughter months of the year, speaks for itself.”
Boxed beef prices were higher on 117 loads, with the Choice cutout up $1.10 to $344.67 and the Select cutout up $4.90 to $332.97.
“What is eyebrow-raising is that boxed beef prices continue to struggle to respond to such low production levels,” Fish wrote. “Even with carcass weights +20 pounds over a year ago, beef production will be below a year ago this week for the sixth week in a row. Recent beef-focused company results, such as Wendy’s and Tyson Foods, are proof of the struggles of companies who rely on cattle and beef to prosper.”
Feeder cattle
Feeder cattle futures were mixed, with the May contract down 37 cents to $295.70 and the August contract up 30 cents to $299.20.
The CME Feeder Cattle Index was down $2.98 to $293.40.
Corn futures were higher, with the May and July contracts up a penny to $4.47 and $4.55, respectively. All other contracts are lower.
Iowa: Russell Livestock in Russell sold 4,474 head on Monday. Compared to the last auction two weeks ago, steers sold mostly even to sharply higher. Heifers less than 500 lbs. sold $3 to sharply higher, while heifers over 500 lbs. sold mostly $4-28 lower. Benchmark steers averaging 722 lbs. sold for $310-330, averaging $324.92. — Charles Wallace, WLJ contributing editor
