Markets traded generally sideways last week, unwilling to budge much ahead of the holiday. USDA’s latest corn acreage report stirred up some panic in the feeders, but they were able to find some recovery.
“The excitement leading up to the Fourth of July weekend has almost captured everyone’s attention and you feel the lack of interest in the markets as they wane throughout Thursday’s trade, not doing much of anything,” remarked ShayLe Stewart, DTN livestock analyst.
The June live cattle contract expired Wednesday, June 30, at $122.50. On Thursday, the August contract closed at $123.57 and the October contract at $129.25—barely higher than a week earlier.
The cash cattle market gained some volume last week, but lost some value. Live steers sold between $118-126, averaging closer to $123, and dressed steers sold from $196-202, averaging around $198. Trade through Thursday totaled around 68,000 head.
A week earlier, cash trade was higher in price compared to the week prior, but dismal in volume. Only a total of 48,965 head sold on the negotiated cash market for the last full week of June, compared to a week earlier at 79,496 head (also not a large volume). Live steers averaged $125.35 and dressed steers averaged $198.07.
“Packers play a smart, strategic psychological game and they knew feedlots would be chomping at the bit to move cattle ahead of the holiday as some would be worried about carrying them into next week,” Stewart said as the reason for why cash prices were lower.
Formula trade continues to sell at a higher premium, at just under $200.
The Fed Cattle Exchange listed 5,362 head for their weekly Wednesday auction, of which 608 head sold. Texas/Oklahoma/New Mexico sold the brunt of the offering, with 498 head sold. Steers averaged $121.50. Kansas sold the remaining head, with heifers averaging $122.
Other opening bids for other lots ranged from $118-120, with most reserve bids set at $122.
Total slaughter for the week as of Thursday was 477,000 head, a couple thousand head higher than a week earlier. Packers were planning for the holiday weekend and trying to get in a few extra head before slaughter capacity was reduced. Total slaughter for the week is likely to reach only 630,000 head. Slaughter through June 26 is projected to reach 661,000 head. Actual total slaughter for the week ending Saturday, June 19, was 664,166 head—closer to where the industry needs to be.
Boxed beef prices continue to decline after hitting their seasonal peak in June. Over a week, the Choice cutout lost about $24 to $287.65 and the Select cutout lost about $8 to $266.93. The Choice-Select spread also continues to weaken, down over $10 in a week.
Feeder steers
USDA released a bullish corn acreage report Wednesday, sending feeders lower. Most corn contracts closed limit up that day, although there was little movement Thursday.
As of Thursday, the July corn contract was sitting over $7 again at $7.19 and the September contract was at $6.01. A week earlier, the contracts were more than 50 cents lower.
Feeders managed to recover some of their losses Thursday, bringing the August contract back up to $156.32 and the September contract to $159.07, slightly down from a week earlier. The CME Feeder Cattle Index was sitting at $146.31 as of Thursday, about 18 cents lower from the week prior.
“With an unexpected smaller increase in both corn and soybeans, production for this year’s crop will hang on crop yield, and the current estimate of slightly under 180 bushels per acre is at risk for reduction from the existing drought in the western part of the country,” wrote the Cattle Report.
The report continued that this environment will leave cattle and corn prices vulnerable to the latest weather forecasts for the rest of the growing season. It also means high corn prices will likely remain and food costs for all consumers will rise.
Missouri: Joplin Regional Stockyards in Carthage sold 9,000 head Monday. Compared to the last week, steers and heifers sold steady to $4 higher, with most advances on weights over 700 lbs. Benchmark steers averaging 771 lbs. sold between $143.50-156.25.
New Mexico: Roswell Livestock in Roswell sold 1,424 head on Monday. Compared to the previous auction, steer and heifer calves under 600 lbs. sold $5-10 lower, though quality was not as attractive and feeders over 600 lbs. were mostly $2-4 lower. A small group of steers averaging 822 lbs. sold for $136.
Oklahoma: Oklahoma National Stockyards in Oklahoma City sold 9,200 head Monday. Compared to the prior sale, feeder steers and heifers sold $2-4 higher. Steer calves were lightly tested and a few sales were $4 higher, while heifer calves sold $2-8 higher. Benchmark steers averaging 724 lbs. sold between $143.50-154.
South Dakota: Sioux Falls Regional Cattle Auction in Worthing sold 1,633 head Monday. Compared to a week earlier, feeder steers and heifers sold unevenly steady, except steers 850-900 lbs. sold steady to $5 higher; heifers 750-800 lbs. sold $1-2 higher; and 900-950 lbs. sold $7-8 higher. — Anna Miller, WLJ managing editor
