Cattle markets took a dive today after the March corn contract skyrocketed 25 cents to $5.17.
The February live cattle contract was down 92 cents to $112.47 and the April contract was down 70 cents to $117.65.
“Traders seem opposed to risking their positions in the nearby contracts and feel much safer investing in the contracts trading later this summer,” ShayLe Stewart, DTN livestock analyst, commented in her midday livestock comments.
Cash trade picked up today, but the volume was still on the lighter side at 5,732 head. Steers sold between $108.50-110. Dressed steers sold between $173-174.
A total of 8,800 head of formula cattle averaging 889 lbs. averaged $179.20.
“Thankfully midday boxed beef prices printed higher, which comes as one of the limited supporting factors to this week’s cash market,” Stewart remarked.
The Choice cutout was up $1.45 to $209.14 and the Select cutout was up $2.35 to $198.09 on 172 loads.
Today’s slaughter is projected at 119,000 head, a few thousand head shy of the same time last year. Yesterday’s slaughter number was adjusted from 119,000 head to 116,000 head.
Today’s World Agricultural Supply and Demand Estimates (WASDE) report shared lower corn stocks than expected, and corn prices skyrocketed as a result.
“Higher corn prices don’t necessarily come as surprise as many assumed that the market’s top wasn’t in, but just how high the market will scale still remains the unanswered question,” Stewart said.
The January feeder cattle contract dropped $2.77 to land at $133.22 and the March contract dropped $2.92 to close at $133.97. The latest CME Feeder Cattle Index was reported today, down 7 cents to $136.23.
“Tuesday’s stout surge in corn prices will most likely derail some of the strength that was found in the feeder cattle markets throughout the countryside. The problem is not only corn-based though, but really all inputs.
“With available wheat fields hard to come by, hay prices plenty high and now corn prices above what the industry’s grown accustomed to over the last six years, producers and buyers alike will have to get creative in how they manage these calves and feeder cattle,” Stewart said.
Iowa: Russell Livestock in Russell sold 4,536 head Monday. Compared to the sale prior, steers under 650 lbs. sold steady to $5 higher, and those over 650 lbs. were $1-4.50 lower. Heifers under 600 lbs. were $1.50-6.50 higher and the 600-750-lb. heifers were $1 lower to $1 higher. The 750-800-lb. heifers were $8 lower. Benchmark steers averaging 724 lbs. sold between $133.75-145, and averaged $139.70.
New Mexico: Roswell Livestock Auction in Roswell sold 1,121 head Monday. Compared to the last sale: Steer calves under 600 lbs. sold $2-4 higher; over 600 lbs. sold $3 higher on comparable quotes; a few 700-800 lbs. sold $5 lower. Heifer calves and feeders sold steady to $3 higher, except 300-400 lbs. sold $7-9 higher. Benchmark steers averaging 724 lbs. sold between $133-140, and averaged $136.25.
South Dakota: Sioux Falls Regional Cattle Auction in Worthing sold 5,456 head Monday. Compared to last week, feeder steers were $2-5 lower. Feeder heifers were $2-5 lower, with instances of $8 lower on 650-700 lbs. Benchmark steers averaging 762 lbs. sold between $128.50-138, and averaged $135.79. — Anna Miller, WLJ editor