Cash trade was steady to $2 lower over the week, and futures were unable to find much momentum in either the live cattle or feeder cattle complexes. Slaughter volumes are likely to dwindle until the end of the year, with post-holiday demand lower.
Live cattle futures experienced losses over the week, with the December contract down 93 cents to close at $136.72 and the February contract down $1.77 to close at $137.80.
“The downward pressure from all angles has been absorbed and with the Christmas and New Year holidays just weeks away, the pressure could last until the beginning of 2022,” ShayLe Stewart, DTN livestock analyst, wrote in her Thursday midday comments.
Cash trade took some time to develop over the week, with the brunt of sales occurring Thursday. Live steers sold between $137-141, mostly averaging $139.42. Dressed steers sold between $218-221, averaging $219.68.
The Fed Cattle Exchange hosted its weekly sale Wednesday and offered 1,849 head, of which none sold. Opening bids were mostly at $138-139, while reserves were set at $141-143.50. The Exchange held an additional sale Thursday, offering 1,708 head, of which 278 head sold. High bids ranged from $130.25-140.25.
Cash trade for the first week of December totaled 112,080 head. Prices were the second highest they’ve been in history, behind only 2014. Live steers averaged about $2 higher at $140.33, and dressed steers averaged $219.92, about $3 higher.
The national weekly direct beef type price distribution for the week of Nov. 29 to Dec. 6 was the following on a live basis:
• Negotiated purchases: $140.51.
• Formula net purchases: $139.21.
• Forward contract net purchases: $134.37.
• Negotiated grid net purchases: $137.88.
On a dressed basis:
• Negotiated purchases: $219.85.
• Formula net purchases: $219.50.
• Forward contract net purchases: $203.62.
• Negotiated grid net purchases: $213.40.
Slaughter through Thursday was projected at 489,000 head, about a thousand head higher than the week earlier. Slaughter for the first week of December is estimated at 676,000 head. Actual slaughter for the last week of November was 567,528, down substantially due to the Thanksgiving weekend.
Boxed beef prices continue to fall, and the Choice/Select spread was recorded at $12.87 Thursday afternoon. The Choice cutout lost almost $7.50 to close at $264.55, and the Select cutout lost about $6.50 to close at $251.68.
“Boxed beef values are falling hard, the Choice back down to the summer low yesterday afternoon,” Cassie Fish, market analyst in the Beef, wrote Thursday. “Wholesale prices won’t bottom until just after the Christmas holiday and a trip to $250 on the Choice is not out of the question.”
The weekly export report revealed beef net sales of 4,200 metric tons for 2021, a marketing-year low, down 80 percent from a week earlier and 81 percent from the previous four-week average. The top three buyers were Canada, China and Japan.
Pre-report estimates of the Cattle on Feed report, due out the week of Christmas, include one more day of slaughter than 2020. The number of cattle on feed is projected to be slightly down, while placements and marketings are expected to be a few percentage points higher.
Feeder cattle
Feeder cattle futures were unable to find momentum over the week and ultimately closed lower. The January contract lost $1.70 to close at $164.07, and the March contract lost $3.25 to close at $165.07. The CME Feeder Cattle Index didn’t budge much and only gained 29 cents to close at $161.63.
Corn futures fared better, with the December contract up 11 cents to $5.88 and the March contract up 15 cents to $5.91.
“Sale barns only have this week and next before most head out for the remainder of the year to take some much-needed time off,” Stewart said. “With that being the case, sales are seeing large receipts this week and thus far they’ve been met with strong interest.”
Colorado: Winter Livestock in La Junta sold 7,134 head Tuesday. Compared to a week earlier, feeder steers and heifers under 500 lbs. sold $5-8 higher, with instances of $10 higher on steers. Steers 500-700 lbs. sold $3-5 higher, and over 700 lbs. sold steady to $3 higher, with instances of $8 higher. Heifers 500-700 lbs. sold steady to $2 higher, and over 700 lbs. sold $2-3 higher.
Kansas: Winter Livestock in Dodge City sold 4,640 head Wednesday. Compared to a week earlier, yearling steers 600-975 lbs. sold steady to $4 higher. Steer calves 400-600 lbs. sold $4-7 higher. Heifers 400-900 lbs. sold $4-10 higher. Benchmark steers averaging 727 lbs. sold between $161.75-166.50, averaging $164.13.
Missouri: Joplin Regional Stockyards in Carthage sold 10,000 head Monday. Compared to the sale a week prior, feeder steers under 550 lbs. traded $5-9 higher, and heavier weights traded steady to $3 higher. Feeder heifers traded steady to $3 higher. Benchmark steers averaging 766 lbs. sold between $158-164.50, averaging $162.10.
Nebraska: Tri-State Livestock in McCook sold 1,100 head on Monday. USDA did not provide a comparison to the previous auction but noted demand was good. A group of steers averaging 680 lbs. sold between $155.25-164.50, averaging $159.12.
Oklahoma: Oklahoma National Stockyards in Oklahoma City sold 18,000 head Monday. Compared to a week earlier, feeder steers sold steady to $3 higher, and feeder heifers sold unevenly steady. Steer calves sold $2-4 higher, and heifer calves sold $2-5 lower. Benchmark steers averaging 772 lbs. sold between $157-168.50.
South Dakota: Sioux Falls Regional Livestock in Worthing sold 3,835 head on Monday. Compared to the last auction, feeder steers under 650 lbs. were steady to $3 lower, and over 650 lbs. were steady to $3 higher. Feeder heifers under 600 lbs. had evident higher undertones; over 600 lbs. sold $1-3 higher, except 800-850 lbs., which were $1-3 lower. Benchmark steers averaging 726 lbs. sold between $161-171.50 and averaged $167.61. — Anna Miller, WLJ managing editor
