Cattle trade was not very exciting this week. The live cattle futures traded in a narrow range all week. June traded between $94-96 and closed today at $94.25 and August lost 25 cents to close at $96.10.
August feeders gained 35 cents Thursday to close $133.22 and September was 25 cents higher to $134.42. It appears that feeder cattle trades start on an optimistic note, then by the end of the session they lose whatever they gained.
The negotiated cash trade was slower this week as packers were taking in more formula grid cattle. Today, 35,300 head weighing 903 lbs. were priced on the grid formula and brought $166.50. Cash trade in the Texas Panhandle, when compared to last week, the bulk of live trades moved $5-7 lower from $93-97. In Kansas, when compared to the last reported market on Wednesday, the bulk of live trades moved steady to $2 higher at $97. In Nebraska a few live and dressed trades moved at $95 and $155, respectively. However, there were not enough trades for a market trend.
ShayLe Stewart, DTN market analyst, said “It’s a feeder cattle junkie’s dream this Thursday... Even though there are enough reasons in the marketplace to be as bearish as the scrooge himself, the live cattle market is trending higher, feeder cattle contracts are higher and the two specialty sales taking place right now on Northern’s Livestock Video Auction and Superior’s Livestock Auction are faring considerably.”
Packers are slowly getting back to reasonable slaughter levels. The estimates on slaughter have been optimistic, market analysts were looking for a 665,000 slaughter the week of June 13, but it was 644,000 head. The daily estimates have been 120,000 head per day.
With more beef on the market the cutout continues to fall. Today, Choice lost $1.43 to $208.26 and Select was down to $199.93 on 196 priced loads. The ground beef markets haven’t lost near as much as the fed beef cutout, the 90 percent lean was at $253.90 and the 50-50 trim was at $65.61. These markets have only lost about 18 percent of their value from the peak several weeks ago.
The last quoted cow beef cutout was June 19 and was $206.34. The same day, the Select cutout was posted at $203.81; the cow cutout was $3 higher than Select beef.
The Cattle Report folks said, “Few forward contracts of fed beef cattle are occurring. Forward contracts from retailers with packers has slowed and this slows packers’ interest in forwarding live cattle purchases. Front end supplies are expected to remain abundant and neither retailers or packers see little reason for forward purchases. Forwards for July through year-end are half of normal volumes.
“As slaughter volumes have returned to near normal levels, box prices have now completed the sharp spike up and the sharp spike down. Prices in the low $2 level will be the foundation for discovery of a trade price level that will balance total beef production with total beef demand. No one is able to forecast that price level until the market tests the elasticity of demand at various price levels. Many complex forces are currently at work in our economy and navigating through the excess of fed cattle will be in uncharted waters.”
West coast markets are amid the spring, off-the-grass run. Turlock Livestock Auction in Turlock, CA, offered 4,127 head and steer calves between 400-500 lbs. sold between $160-178, 700-800-lb. steers traded between $125-137, and 128 steers weighing 683 lbs. averaged $145.50.
Cattlemen’s Livestock Auction in Galt, CA, offered 3,126 head and 400-500-lb. steers traded between $135-165, and 700-800-lb. steers traded between $120-140. Slaughter cows sold $64-72 and slaughter bulls traded between $75-93
OKC West Livestock Auction in El Reno, OK, offered 7,576 head. Compared to last week: feeder steers sold $2-3 higher; heifers sold mostly steady to $1 higher. Demand was good. Steer and heifer calves were too lightly tested for an accurate trend. Demand was moderate to good. Quality was mostly plain to average. Rainfall and cooler temperatures have come across the trade area. 598 steers weighing 829 lbs. averaged $131.51.
The video sales are pricing fall delivery calves today and had active sales; for example 80 Red Angus steer calves weighing 680 lbs. with VAC34 brought $134 for November delivery. A black Angus set of 80 steers weighing 625 lbs. with VAC34 brought $142.
There was a set of lighter calves weighing 475 lbs., good program cattle, selling for $169.50 for October delivery, and heifer mates brought $165. — Pete Crow, WLJ publisher