Wednesday markets
Feeder cattle futures closed up triple digits as corn contracts were lower by 16 cents a bushel. The cash cattle market saw light trade and will likely develop tomorrow or Friday.
Live cattle closed higher, with the February contract up 42 cents to $157.27 and the April contract up 55 cents to $161.42.
“The live cattle complex is trading higher into Wednesday afternoon as the market anticipates cash cattle will indeed trade higher again this week,” ShayLe Stewart, DTN livestock analyst, wrote in the midday comments. “It’s not usual for the feeder cattle complex to lead the live cattle contracts higher. But with the breakout trade that feeders are fronting, the live cattle contracts are taking note.”
Cash trade was light, with 2,482 head selling between $158-159.50, averaging $158.04. Dressed steers sold between $248-252 and averaged $250.35.
On the formula side, 33,800 head averaging 880 lbs. sold for an average of $252.32.
The national weekly direct beef type price distribution for the week of Dec. 26 to Jan. 2 was the following on a live basis:
• Negotiated purchases: $157.99.
• Formula net purchases: $158.05.
• Forward contract net purchases: $165.80.
• Negotiated grid net purchases: $159.88.
On a dressed basis:
• Negotiated purchases: $251.97.
• Formula net purchases: $253.13.
• Forward contract net purchases: $236.67.
• Negotiated grid net purchases: $250.63.
Slaughter for today is expected to be 125,000 head, 3,000 head below last week.
Boxed beef closed mixed on 138 loads, with the Choice cutout down $4.05 to $282.89 and the Select cutout up $1.77 to $256.40.
“Packer margins will be under pressure, but the likely high wholesale values will help them. Since packers have about 80% of their cattle needs committed, they only have to worry about topping off slaughter schedules,” Cassie Fish, market analyst for The Beef, wrote. “But all of their suppliers, meaning cattle feeders, will have fewer cattle on feed for the next two years also, so cattle prices will average higher over the next two years than any time in history.”
Feeder cattle
Feeder cattle futures closed higher triple digits, with the January contract up $2.52 to $185.25 and the March contract up $3.45 to $188.15. The CME Feeder Cattle Index was down 29 cents to $180.73.
“The market’s momentum is fully stemming from the fact that corn prices are taking a nose-dive, as the live cattle complex is trading higher, but only mildly so,” Stewart wrote. “It is unlikely the cash cattle market begins to trade cattle this afternoon as feedlots are firm in their asking prices. But come Thursday, if cattle begin to trade for more money, that will only add more momentum to feeders’ rally.”
Corn futures closed lower, with the March and May contracts down 16 cents a bushel to $6.53 and $6.54, respectively.
Colorado: Winter Livestock in La Junta sold 1,311 head Tuesday. Compared to the last auction two weeks ago, steer and heifer calves in a light test sold mostly steady. Yearling feeder steers over 700 lbs. sold steady to $3 higher. Benchmark steers averaging 732 lbs. sold between $177-185, averaging $183.18.
Oklahoma:OKC West in El Reno sold 4,500 head Tuesday. Compared to two weeks ago, steer and heifer calves sold $12-15 higher. Benchmark steers averaging 713 lbs. sold between $182-186 and averaged $184.59. —Charles Wallace, WLJ editor
