Markets seemed to lose some of their momentum gained from a week earlier. Futures declined; cash trade prices were moderately higher, but volume decreased; and boxed beef prices seemed to have bottomed out.
Live cattle futures closed lower from the week prior. The October contract lost 78 cents over the week to close at $124.97, and the December contract lost 75 cents to close at $129.55.
“The lack of higher cash cattle trade during the week and beef values that have been steady at best are weighing on futures, which had focused on a potential market turnaround over the last week,” wrote Rick Kment, DTN contributing analyst, in his Thursday midday comments.
Cash trade through Thursday morning only totaled about 56,000 head. Wednesday saw some purchases up to $127, although trade was generally at the $123-126 mark. Dressed steers traded from $195-196. Formula cattle continue to trade at almost a $10 premium.
Cash trade through the week ending Oct. 15 totaled a substantial 95,870 head. Live steers averaged $123.84, and dressed steers averaged $195.70.
“This has been one of, if not the strangest, years in history in the fed cattle market,” remarked Cassie Fish, market analyst, in The Beef. “Weeks, then months go by, and cash prices are stagnant. There are reports of improvement in currentness in spots, but the progress is excruciatingly slow. The downside seems nil. But the upside? So far, limited.”
The Fed Cattle Exchange hosted its weekly online auction Wednesday and listed 2,757 head, of which none actually sold. The Exchange also hosted a special sale on Thursday, listing 2,430 head, also unable to sell any.
The national weekly direct beef type price distribution for the week of Oct. 11 to Oct. 18 was the following on a live basis:
• Negotiated purchases: $123.84.
• Formula net purchases: $125.98.
• Forward contract net purchases: $128.45.
• Negotiated grid net purchases: $127.16.
On a dressed basis:
• Negotiated purchases: $195.64.
• Formula net purchases: $200.39.
• Forward contract net purchases: $197.86.
• Negotiated grid net purchases: $199.37.
Slaughter through Thursday totaled 120,000 head, bringing the week’s total to 482,000. The same time a week earlier, slaughter was 2,000 head behind. Slaughter for the week ending Oct. 15 is expected to total 646,000 head. USDA released actual slaughter for the first full week of October (through Oct. 9), which totaled 656,659 head.
Boxed beef prices have slowly started climbing again. The Choice cutout closed 34 cents higher to $280.66, and the Select cutout closed $2.04 higher to $262.72. The Choice/Select spread is also tightening up, sitting at $17.94.
Pre-report expectations for the Cattle on Feed report (released Friday, after WLJ press time) had numbers below a year ago. Cattle on feed and placements are expected to be a percent or two off. Marketings are also projected to be about 3 percent below last year. “The cattle feeder is not the culprit here, but rather the inadequate daily fed kill throughput at plants, a well-known and frustrating reality,” Fish commented.
Feeder cattle
Feeder cattle futures also lost value over the week. The October contract closed at $156.25, down $2.17, and the November contract closed at $159.07, down $3.08. The CME Feeder Cattle Index gained $1.10 over the week to close at $155.11.
“Deferred futures are showing the most pressure, as continued concerns surround production costs and future demand,” Kment said. “But given price level and recent market swings, feeder cattle markets may continue to hold within the currently wide trading range.”
Corn has gained a little value, with the December contract up 16 cents over the week to close at $5.32 and the March contract also up 16 cents to close at $5.41.
Iowa: Russell Livestock in Russell sold 2,802 head on Monday. Compared to the previous auction, steers over 750 lbs. sold mostly $6 higher to as much as $10 higher. Heifers under 650 lbs. were $6 higher, while the heavier heifers were sharply higher with limited comparable numbers. Benchmark steers averaging 728 lbs. sold between $157.50-169, averaging $163.39.
Colorado: Winter Livestock in La Junta sold 758 head Tuesday. Compared to a week earlier, steer and heavier calves were lightly tested. Yearling feeder steers were steady to $1 higher, except 850-900 lbs. were $5 higher. Yearling feeder heifers sold mostly steady. Benchmark steers averaging 787 lbs. sold between $148.50-149.50, averaging $149.10.
Kansas: Winter Livestock in Dodge City sold 2,812 head Wednesday. Compared to the previous week, feeder steers and heifers 400-900 lbs. sold $5-8 higher, with instances of $10 higher. Benchmark steers averaging 770 lbs. sold between $153.50-162, averaging $155.43.
Missouri: Joplin Regional Stockyards in Carthage sold 4,500 head Monday. Compared to a week earlier, feeder steers under 600 lbs. traded steady, and steers over 600 lbs. sold $2-6 higher. Feeder heifers traded steady to $2 higher. Benchmark steers averaging 766 lbs. sold between $153-163.50, averaging $159.54.
Nebraska: Tri-State Livestock in McCook sold 1,465 head on Monday. Compared to the previous week, steers and heifers were steady to $6 lower on moderate to good demand. A group of steers averaging 615 lbs. sold for $174.50.
Oklahoma: Oklahoma National Stockyards in Oklahoma City sold 6,500 head Monday. Compared to the sale a week earlier, feeder steers and heifers sold $1-3 higher. Steer calves sold $2-4 higher, and heifer calves sold unevenly steady. Benchmark steers averaging 726 lbs. sold between $153-161, averaging $156.68.
South Dakota: Sioux Falls Regional Cattle Auction in Worthing sold 4,890 head on Monday. Compared to the previous auction two weeks earlier, feeder steers and heifers sold unevenly steady. A much higher undertone was evident on the heavier weights of both steers and heifers. Benchmark steers averaging 775 lbs. sold between $153.25-166.75, averaging $161.58.
Wyoming: Torrington Livestock in Torrington sold 4,218 head Wednesday. Compared to a week earlier, steer and heifer calves sold unevenly steady to weak, with the exception of steers and heifers over 600 lbs. trading $3 lower. Benchmark steers averaging 760 lbs. sold for $163. — Anna Miller,WLJ managing editor
