Packers had yet to step up to the plate even though they were short bought due to the low volume of cattle purchased the previous week. The downgrading of the U.S. long-term credit rating by Fitch Rating Agency caused weakness and a sell-off in the commodity markets mid-week.
Live cattle futures were slightly higher, with the August contract up 45 cents to $178.50 and the October contract up $1.80 to $181.30.
Cash trade was very light over the week, with only 6,000 head sold through Thursday, averaging $188.33.
“In the country, packers aren’t bidding much and the WTD total trade is astonishingly low at 3.5k head,” wrote Cassie Fish, market analyst, in The Beef on Thursday. “There is a massive standoff in the south where packers continue to try and press prices below $180. So far, they have not had much luck. But they will pull contracts and formulas and bang the bearish drum as long as they can.”
Cash trade through the week ending July 23 was 86,678 head. Live steers averaged $186.25, and dressed steers averaged $295.28.
The national weekly direct beef type price distribution for the week of July 24-31 was the following on a live basis:
• Negotiated purchases: $185.29.
• Formula net purchases: $187.34.
• Forward contract net purchases: $183.68.
• Negotiated grid net purchases: $184.48.
On a dressed basis:
• Negotiated purchases: $294.02.
• Formula net purchases: $293.20.
• Forward contract net purchases: $277.
• Negotiated grid net purchases: $294.81.
Slaughter through Thursday was estimated to be 494,000 head, 5,000 head below a week earlier and 2,000 head lower than a year earlier. Total slaughter for the week prior was projected to be 619,000 head. Actual slaughter for the week ending July 22 was 625,915 head. The average steer dressed weight was 893 lbs., the same as the prior week.
“Packers reduced throughput last week and the weekly harvest was only 619k head,” Fish wrote on Monday. “Estimates are for a repeat this week and next as they attempt to stop their red ink. As the cutout makes its seasonal low, the full court press of breaking cash fed cattle prices was on last week.”
Boxed beef prices were slightly lower, with the Choice cutout down 85 cents to $302.01 and the Select cutout down $1.45 to $278.31.
Feeder cattle
Feeder cattle futures were higher, with the August contract up $3.30 to $247.95 and the September contract up $3.38 to $251.65. The CME Feeder Cattle Index gained $2.59 to $244.88.
Corn futures were sharply lower, with the September contract down 53 cents to $4.80 and the December contract down 49 cents to $4.93.
“Corn condition ratings slipped by a few percentage points in the Monday afternoon Crop Progress report, which isn’t too surprising given the dry weather across the middle of the Corn Belt,” Elaine Kub, DTN contributing analyst, wrote in her midday comments on Tuesday.
“Meanwhile, nationwide pasture and range conditions dropped even more noticeably in the past week—now only 39% good to excellent and 29% poor to very poor. There are certainly some regions where the grass looks relatively better this year than last year, however, and cow-calf operators are likely considering expansion, to the degree they are able, when the futures market is suggesting feeder calf prices above $250 all the way out to May 2024.”
Missouri: Joplin Regional Stockyards in Carthage sold 3,804 head Monday. Compared to the previous auction, feeder steers and heifers sold steady to $4 higher. Benchmark steers averaging 784 lbs. sold between $244-245.25, averaging $244.56.
New Mexico: Roswell Livestock in Roswell sold 1,330 head Monday. Compared to the previous auction, steer calves sold $11-19 higher, except 450-500 lbs. traded $9 lower. Feeder steers and heifers had insufficient numbers last week to compare. Heifer calves 550-600 lbs. sold $9 higher. A group of steers averaging 634 lbs. sold between $220-270.50, averaging $253.53.
Oklahoma: Oklahoma National Stockyards in Oklahoma City sold 4,253 head Monday. Compared to the previous auction, feeder steers sold steady. Feeder heifers traded steady to $2 higher. Steer calves sold $2-4 higher. Heifer calves traded $3-6 higher. Benchmark steers averaging 768 lbs. sold between $245-250.75 and averaged $248.14.
South Dakota: Sioux Falls Regional Cattle Auction in Worthing sold 2,300 head Monday. Compared to the previous auction, feeder steers 950-1,050 lbs. sold steady to $3 higher, and over 1,100 lbs. traded $1 lower, while other weights were not well compared. Feeder heifers sold with higher undertones, but weights were not well compared. Benchmark steers averaging 759 lbs. sold between $261-264 and averaged $263.11. — Charles Wallace, WLJ contributing editor
