Wednesday markets
Live cattle futures surged to new all-time highs, buoyed by strong cash market signals.
“The live cattle complex is continuing to charge onward and higher as traders remain optimistic that the market’s fundamental strength is going to remain viable in the months ahead, as supplies remain thin and demand is still utterly incredible,” ShayLe Stewart, DTN livestock analyst, wrote in her midday comments.
Live cattle futures gained over $3, with the August contract up $3.35 to $233.07 and the October contract climbed $3.27 to $229.72.
“Discount CME live cattle futures have answered the stronger cash news this morning by rallying triple digits and establishing new all-time highs again,” wrote Cassie Fish, market analyst, for The Beef. “So far today, Kansas traded a few at $237 and a $235 bid noted. To compare, last week’s Kansas top was $237.50, and the average on 3,162 steers was $232.87. There is a general expectation that fireworks may well be seen in the cash market trade before this week is over.”
Cash trade was light, with 1,836 head sold for $235.
On the formula side, 23,400 head averaging 905 lbs. sold for an average of $373.60.
Today’s slaughter is estimated to be 112,000 head, 2,000 head lower than the previous week.
“Slaughter this week could be as low as 540k head, rivaling 2015,” Fish wrote. “Boxes are correcting seasonally as expected and are back in the $360 support area. This is certainly one of the most challenging periods in modern history for the beef packing industry as the industry establishes multiple ‘new normals’. One big plus is that domestic beef demand remains on solid footing despite record high prices, which was not the case in 2014-2015.”
Boxed beef prices continued to fall on 168 loads, with the Choice cutout down $2.20 to $361.99 and the Select cutout $1.57 lower to $340.91.
Feeder cattle
Feeder cattle also saw contract highs, with the August contract up $2.75 to $338.95 and the September gaining $2.67 to $339.75.
The CME Feeder Cattle Index closed up $2.27 to $332.20.
Corn futures closed in the green, with the September contract up 2 cents to $3.91 and the December contract up a penny to $4.12.
Kansas: Winter Livestock in Dodge City sold 207 head on Wednesday. Compared to last week, feeder steers and heifers were not well tested, but a higher undertone was noted. A group of steers averaging 755 lbs. sold for $355.
South Dakota: Philip Livestock in Philip sold 1,659 head on Tuesday. An accurate comparison could not be made due to the lack of recent auctions. Benchmark steers averaging 766 lbs. sold for $351-359, averaging $354.11.
Utah: Producers Livestock in Salina sold 347 head on Tuesday. Due to low sales, an accurate trend could not be provided. Benchmark steers averaging 725 lbs. sold between $350-355, averaging $352.74. — Charles Wallace, WLJ contributing editor
