Cattle markets were a bit stronger today, futures and cash markets were also stronger. Cattle slaughter is slowly increasing with today’s estimated estimated slaughter at 93,000 head and growing. There are plenty of cattle waiting to be processed.
The fed cash market was at least moderately active for a Monday. There were 3,926 head traded. In Nebraska, a few early live purchases traded from $119-$120 with a few dressed purchases at $190 in the corn belt. A few early dressed purchases traded from $180-190.
Trade was inactive on light demand in the Southern Plains. There were not enough purchases in any feeding region for an adequate market test. The latest established market in any feeding region was last week with live purchases in the Southern Plains from $110-120. Today’s weighted average was $190 dressed and $119.53 on live cattle. There were 16,300 head priced on the formula grid which averaged $171.27.
DTN reported that “Live cattle contracts trade mostly higher although the initial hours of Monday were stronger than prices are heading into the afternoon. The futures closed with June live cattle gaining $172 to $98.95 and August also up by $1.02 to close at $98.85. October live cattle are up $0.70 to close at $101.05.
“Last week was a good week for cash cattle as prices rallied anywhere from $5-15 stronger and potentially even more encouraging than that was that last week’s total negotiated cash cattle purchased totaled 103,413 head all for the one-to-14-day delivery.
“Show lists this week are somewhat higher in Kansas while higher in Texas, Nebraska and Colorado. Cash trade was 39 percent of the cattle traded nationally last week.
“Packers continue to work at the backed-up supply of fed cattle and last week’s slaughter was just shy of 500,000 head—last week’s slaughter totaled 499,000 head, which was 10.4 percent higher than the previous week.”
Boxed beef prices are lower: Choice down $19.37 to $414.95and Select down $24.19 to $394.87 on 179 loads. Choice and Select beef have each dropped about $50 since last Monday. There were no trades of 90 percent lean today but the 50-50 trim traded at $248.30 on a half a million pounds and is down $50 from last week as well.
DTN also reported feeder cattle contracts have rallied throughout the day but are needing encouragement and substantial, evident support to push contracts higher than what they are currently trading at.
May feeders were up $1.87 at $126.60, August feeders were up $1.47.at $132.55. The countryside is willing to move the market higher as buyers see the opportunity in buying calves at the prices they are and the good condition in which grass is growing throughout most of cow-calf country.
National Stockyards in Oklahoma City offered 9,100 head today and compared to last week, feeder steers were $1-3 higher, feeder heifers were $2-$6 higher under 850 lbs. and over 850lbs. were $1-2 lower.
Steer calves were mostly steady to firm. Heifer calves were $1-4 higher. Demand was moderate to good for all classes. Benchmark steers 700-750 lbs. averaged $136.21. The latest CME Feeder Cattle Index was $125.73
Cassie Fish’s comments for the day were: “With the economics of supply and demand on their collective ear, experienced business people in the cattle and beef industry find themselves in unprecedented territory.
“Never before have this many market-ready cattle been backed up and one of the few knowns is that this situation will worsen.
“The shortfall of weekly slaughter is gravely sobering and the inability of extremely competent companies to quickly reverse this situation has been surprising and deeply concerning. This week’s slaughter is hopefully 530k head or higher, 31k above last week, though at least one large plant is barely operating while another comes back on line.
“The resulting wholesale beef shortage, now in its second month, sent retail prices to a record high last month and this month will likely average even higher. Retailer margins have gone dramatically red and less beef for sale means consumers found something else to eat.
“Wholesale beef prices topped last week and are falling fast, packers allowing prices to correct with the knowledge that a 20 standard deviation move is an anomaly that will stand unchallenged in history for years most likely. As production normalizes, something that can’t happen fast enough, prices will fall even more.” — Pete Crow, WLJ publisher