The slight momentum cattle markets made rounding out 2020 was lost today.
“The cattle contracts are feeling immense bearish pressure as the corn market trades at levels not seen in the last six years and feedlots’ cost of gain expenses rise considerably,” remarked ShayLe Stewart, DTN livestock analyst, in her midday comments today.
The corn market pushed both live and feeder cattle contracts lower. The February live cattle contract dropped $2.72 to $112.30 and the April contract was down $3 to $116.25.
“Following last week’s strong cash cattle market, feedlots are expected to price cattle higher again this week as boxed beef prices continue to show strong development and ample demand. Showlists appear to be higher in all major feeding states this week,” Stewart said.
Only 718 head traded on the cash market today, averaging $110. There were not enough purchases for a dressed market trend. A total of 33,200 formula cattle averaging 883 lbs. sold for $175.92.
Boxed beef prices have remained stable, with the Choice cutout up 52 cents to $209.87 and the Select cutout up $1.56 to $196.53 on 102 loads. Slaughter last week totaled 515,000 head after a large Saturday slaughter. Today’s slaughter is projected at 115,000 head, several thousand head behind last week and last year.
“Feeder buyers are looking at the corn market, relooking at their cost of gain expenses and are not liking how their breakevens are appearing,” Stewart commented. “Technically it’s a tough market as the corn market’s price levels beg the feeder cattle contracts to trade lower, but yet feeders are still being met with moderate demand throughout the countryside.”
The March corn contract skyrocketed to $4.83, nearly 30 cents higher in just a week—and a holiday week at that. The January feeder cattle contract dropped $4 to $134.95 and the March contract dropped $4.20 to $136.02. The latest CME Feeder Cattle Index was down $2.22 to $136.55.
Auction markets are back from the holidays and hosting sales again.
Missouri: Joplin Regional Stockyards in Carthage sold 11,000 head Monday. Compared to the last auction two weeks prior, feeder steers and heifers under 600 lbs. sold steady to $2 higher, and over 600 lbs. sold steady to $3 lower. Benchmark steers averaging 779 lbs. sold between $132-136.75, averaging $135.14.
Oklahoma: Oklahoma National Stockyards in Oklahoma City sold 12,000 head in their first sale of the year. Compared to the last sale on Dec. 14, feeder steers sold $1-4 lower and feeder heifers sold steady to $3 lower. Steer calves sold steady to $3 lower and heifer calves sold steady to $3 higher. Benchmark steers averaging 733 lbs. sold between $130-139.50, averaging $135.88. — Anna Miller, WLJ editor