Cattle markets were up and down on the CME futures, and down on negotiated fed trade. The prevailing live price Wednesday was $101 and $160 on dressed trade. Beef values are falling, and packers are trying to protect their margins, which are approaching $400 per head. Through Thursday, 54,391 head traded on the negotiated cash market. The good news is we’re trading $2-3 higher than last year, which was in the shadow of the Holcomb, KS, Tyson fire.
Slaughter last week was 633,000 head, 21,000 head below the prior week. Packers have secured plenty of cattle and have been a little reluctant to secure more inventory. Daily slaughter was averaging 120,000 head per day to make up for a short week. Seasonally, markets should be picking up a bit. Choice boxes were down $5 for the week to $220.83 and Select down $6 on the week to $207.03 on good volume of 198 loads
ShayLe Stewart, DTN livestock analyst, said, “It’s been a topsy-turvy week for the cattle complex as trade has danced on both sides of steady and there’s yet to be unanimous consensus on which way the market should strategically head. But coming out of a three-day weekend into a shortened week, there’s going to be some volatility given that the week is short, and business must be conducted in a swift manner.
“October live cattle are up $0.40 at $105.10, December live cattle are up $0.27 at $109.42 and February live cattle are up $0.62 at $114.05. Cash cattle trade is keeping with its lower tone as on Thursday morning a few more cattle have traded at Wednesday’s prices. A light sampling sold in Colorado for $101, and bids of $101 are on the table in Texas, Kansas and Iowa. Dressed cattle in Iowa are also being bid at $162.
“As the cattle complex flips back and forth throughout the week dabbling in both higher and lower trade, volatility is high through the complex as there’s not a sound understanding of where the market’s trade should head. There are far more bearish reasons why the market should trade lower as opposed to higher, but choppy sideways trade is summing up this week’s direction,” Stewart said.
African swine fever raised its ugly head in Germany, where a wild hog tested positive and forced Germany into disease control mode. Lean hogs were up the limit at the CME and pulled all the livestock contracts higher. Chinese demand for pork also pushed the hogs higher. The Cattle Report said, “This threatens the possibility of a shutdown of pork exports from the EU to Asia. The beneficiaries would be both U.S. pork and beef as buyers seek to replace EU exports. The Chinese can be expected to behave in their self-interest and trade agreements will not be the driver. The Chinese will purchase red meat where it sells for the best value and fulfills their need.”
Feeder cattle markets are starting to see more volume through the auction markets at lower levels; where fed cattle go, feeders follow. The board was up, then down, then back up as if no one knew where to take the market. Thursday the September feeder cattle contract was 77 cents higher to $139.17, October added $1.35 to $139.60 and November was $1.45 higher to $140.40—a slight uptrend for the week.
The Cattle Report also said, “Stocker and feeder prices are adjusting to the larger supplies currently moving into mostly full feedyards. Prices are lower across all regions and classes of cattle. Placements patterns continue large, threatening further price declines for early next year. The heaviest placement months are in front of us. Feeder prices are outrunning calf prices as rains in the Southern Plains provide winter grazing opportunities.”
Auction markets
Bassett Livestock Auction in Bassett, NE, sold 3,703 head last Wednesday and reported compared with two weeks ago: Steers traded unevenly steady and 900-lb. heifers traded $2 higher. A high demand for 900-lb. steers was noted with several buyers at the auction. Benchmark steers weighing 779 lbs. averaged $153.50.
OKC West in El Reno, OK, sold 4,669 head of feeder cattle Wednesday and reported compared to the prior week: Feeder steers and heifers traded steady to mostly $2 higher. Demand was good for all classes of feeder cattle especially heavier weights. No trend available for steer and heifer calves, however a lower undertone was noted with exception of few trades that were long weaned with multiple rounds of shots trading steady. Demand was moderate. Benchmark feeder steers weighing 785 lbs. averaged $136.67.
Hub City Livestock Auction in Aberdeen, SD, sold 3,533 head and reported compared to the week before, the best test was on steers 800-850 lbs., 951-1,050-lb. steers sold $3-4 higher, 901-950 lbs. steady to $1 higher. The best test was on heifers 750-800 lbs. and 850-950 lbs., steady to $1 higher. Benchmark steers weighing 822 lbs. averaged $143.09. — Pete Crow, WLJ publisher
