Fed cash trade was slow today, with clean-up trade for the week roughly 105,000 head traded on the cash market. Trade was between $106 to $110 live and $172 dressed. The futures markets were uneventful with most contracts trading sideways. December live cattle were down 15 cents to $108.10 and the February contract was off 12 cents to $110.65. A total 13,400 head of formula and grid cattle were priced today at $178.42 weighing 884 lbs. Slaughter weights are coming down suggesting that feedlots are current.
Today’s estimated slaughter was 115,000 head, which was lower than the 120,000-head pace we’ve seen most of this week. Slaughter through Friday was estimated to be 593,000, and with Saturday slaughter, we should see over 650,000 head processed for the week.
Beef prices were stronger with the Choice cutout printing at $237.70 and Select priced at $213.89, on 152 loads. Uncertainty has hit the markets. Holiday beef sales could be tough because of the lack of the hotel-restaurant trade. The cutout should be topping out soon but is expected to trade over $240. Packers are seeing $300-per-head margins at this point.
Futures traders don’t like uncertainty. Cassie Fish in the Beef commented, “It’s hard to remember how much futures trading has changed. There are algo-driven day-traders called framers, who pay to see the entire book of resting orders and pick off buy orders and press the market lower—just to make money. Whether that is an honest day’s work is debatable, but it is legal and blessed by the Chicago Mercantile Exchange. Perhaps this activity wouldn’t have such a taint to it as it does now that the global pandemic is raging and those attempting to make a living in the cattle business are weary from one of the most challenging years ever.”
Feeder cattle futures have been on a down trend the past two weeks. January feeders were down 95 cents to $134.60 and March feeders are down 57 cents to $134.37. In the country heavy feeders were off $4-6, while the light calf market was $10 stronger as the stocker guys are more optimistic about grazing wheat.
The October Cattle on Feed report, released today, showed placements were down 11 percent from last year. October is typically the largest placement month of the year. Cattle on feed was 1 percent higher and marketings were equal to last year’s pace. — Pete Crow, WLJ Publisher