Wednesday markets
Cattle futures climbed sharply as traders renewed bullish sentiment and provided additional technical support to the market.
“Pinpointing what’s driving the rally in the cattle sector is somewhat challenging, but more than anything it seems as though traders have reignited their bullish sentiment toward the market and are now giving the complex more technical support,” ShayLe Stewart, DTN livestock analyst, wrote in her midday comments.
Live cattle futures climbed over $4, with the April contract $4.22 higher to $238.35 and the June contract up $4.50 to close at $235.17.
Cash trade was light, with 348 head sold.
On the formula side, 26,800 head averaging 954 lbs. sold for an average of $391.07.
Today’s slaughter is estimated to be 111,000 head, 5,000 head above the prior week.
Boxed beef prices were higher on 92 loads, with the Choice cutout 52 cents higher to $388.57 and the Select cutout up $1.77 to $380.35.
“Fundamentally, packers have been battling historic red ink by slashing slaughter levels—516k two weeks ago and 519k last week—which has been effective in boosting boxed beef prices and reducing packer losses,” Cassie Fish, market analyst, wrote in The Beef. “The Choice cutout printed just under $389/cwt today, nearly $26/cwt off its February low, where it has started to approach overhead resistance from $390 to $400/cwt.”
Feeder cattle
Feeder cattle futures also saw sizeable gains, with the March contract $6.72 higher to close at $363.92 and the April contract up $7.45 to $360.75.
“The 40-day moving average seems to be giving the complex a little bit of resistance, but if the live cattle complex continues to trade higher, traders may elect to conquer it later in the week,” Stewart wrote.
The CME Feeder Cattle Index was $2.23 lower to $369.59.
Corn futures closed lower, with the March and May contracts 2 cents lower to $4.31 and $4.43, respectively.
Colorado: Winter Livestock in La Junta sold 1,169 head on Tuesday. Compared to the last auction, Feeder steers under 700 lbs. sold unevenly steady and over 700 lbs. sold $10-11 lower. Feeder heifers sold mostly sharply lower across all weight classes. Benchmark steers averaging 713 lbs. sold between $379-380, averaging $379.25.
Nebraska: North Platte Stockyards in North Platte sold 2,705 head on Tuesday. Compared to the last auction, steers and heifers sold mixed. Benchmark steers averaging 777 lbs. sold between $379-386, averaging $384.53.
Utah: Producers Livestock in Salina sold 732 head on Tuesday. Compared to the last auction, feeder cattle sold sharply lower on calves and yearlings. However, a higher undertone was noted on feeders that sold in large groups. Benchmark steers averaging 777 lbs. sold between $337.50-359, averaging $357.33. — Charles Wallace, WLJ contributing editor
