Wednesday markets
Cattle futures slipped in choppy trade as fading fundamentals, shrinking bull interest, and speculation of a waning long-term rally fueled broad unease across the livestock market.
Live cattle futures closed over $2 lower, with the October contract down $2.35 to $231.10 and the December contract $2.47 lower to close at $232.67.
“With no substantial support arising from anywhere, it comes as no surprise that the live cattle contracts are again trading lower, but upon seeing the spot December contract growing closer and closer to the market’s 40-day moving average, anxiousness has again become the underlying tone of the live cattle complex,” ShayLe Stewart, DTN livestock analyst, wrote in her midday comments.
Cash trade was light, with 1,528 head sold. On the formula side, 22,300 head averaging 920 lbs. sold for an average of $384.51.
“The negotiated fed cattle trade got underway this morning with some trade in Texas at $239, $1/cwt lower than last week, while others passed,” Cassie Fish, market analyst, wrote in The Beef. “The same bids of $239 are noted in Kansas and being passed. It’s quiet in the north but expected that cash cattle there will trade lower.”
Today’s slaughter is estimated to be 120,000 head, 2,000 head above the prior week.
Boxed beef prices were lower on 142 loads, with the Choice cutout down $4.44 to $388.18 and the Select cutout $6.80 lower to $366.37.
“Boxed beef prices are in the midst of their September seasonal correction, the most significant correction since July, which occurred post the June seasonal high,” Fish wrote. “At midday, Choice was down $4.89 at $387.73/cwt, the lowest price since August 11. More downside is still anticipated as prices reset before the expected Q4 rally.”
The Cattle on Feed pre-report estimates show that feedlots with 1,000 head or greater will be 99.1% for cattle on feed in September. Placements in August are estimated to be 91%, and marketings for August are predicted at 87.1%.
Feeder cattle
Feeder cattle also closed triple digits lower, with the September contract down $3.30 to $355.02 and the October contract $5.17 lower to close at $349.12.
The CME Feeder Cattle Index was 52 cents lower to $361.63.
Corn futures were lower, with the December and March contracts down 2 cents to $4.26 and $4.44, respectively.
Texas: Lonestar Stockyards in Wildorado sold 1,020 head on Tuesday. There were not enough comparable sales for an accurate trend, but a steady undertone was noted. Benchmark steers averaging 766 lbs. sold for $374.75.
Utah: Producers Livestock in Salina sold 1,177 head on Wednesday. Compared to the previous auction, feeder cattle sold unevenly steady on calves and yearlings. Benchmark steers averaging 755 lbs. sold for $327.50-337.50 and averaged $337.04.
Wyoming: Winter Livestock in Riverton sold 996 head on Tuesday. Compared to the previous auction, yearlings sold mostly steady, and good quality feeder calves traded with higher overtones noted. There were not enough feeder calves from last week to make an accurate comparison. A group of steers averaging 761 lbs. sold for $361. — Charles Wallace, WLJ contributing editor
