Wednesday markets
After two weeks of higher cattle futures, the market reversed course, closing lower.
“This April, most active June LC rallied $19.17 or 9% over 14 trading days, reaching its new contract high yesterday of $210.97,” Cassie Fish, market analyst, wrote in The Beef. “It has been a very steep rally, and today is the first meaningful pullback since April 9. Technically, the market is due for a correction, even though June is discounted to cash fed cattle prices and it steps into the lead spot tomorrow.”
Live cattle futures were lower, with the April contract down 60 cents to $215.75, the June contract down $1.80 to $208.40 and the August contract down $1.62 to $204.05.
Cash trade was moderate, with 2,744 head sold. Live steers sold for $214-220, and dressed steers sold between $340-350.
On the formula side, 23,900 head averaging 902 lbs. sold for an average of $337.79.
“On the bullish side of the spectrum, feedlot managers are likely going to try to hold out and pressure packers into paying steady/higher prices later this week,” ShayLe Stewart, DTN livestock analyst, wrote in her midday comments. “On the opposite side of the spectrum, however, packers are desperate to get ahead of the cash cattle market and they’re throwing every trick in the book at the marketplace to dramatically reduce throughput, including offering bids early in the week in hopes that some feedlot managers will get antsy and let some cattle go early.”
Today’s slaughter is estimated to be 121,000 head, 1,000 head below a week earlier.
Boxed beef prices were lower on 99 loads, with the Choice cutout down $2.95 to $345.31 and the Select cutout down $1.80 to $322.02.
Feeder cattle
Feeder cattle also closed lower, with the May contract down $1.45 to $292.57 and the August contract down $1.87 to $295.02.
The CME Feeder Cattle Index was up $1.43 to $295.14.
Corn regained some of yesterday’s losses, with the May contract up 6 cents to $4.67 and the July contract up a nickel to $4.75.
Montana: Miles City Livestock in Miles City sold 499 head on Tuesday. There were not enough sales for an accurate comparison, but steady undertones were noted. A group of steers averaging 742 lbs. sold for $309.
Utah: Producers Livestock in Salina sold 789 head on Tuesday. Compared to the last auction, steers sold $2-7.50 higher, while heifers were generally steady. A group of steers averaging 779 lbs. sold for $265-300, averaging $282.39. — Charles Wallace, WLJ contributing editor
