(Editor’s note: This report contains market data available as of Wednesday, June 3 due to an earlier WLJ press schedule.)
Rumors and news of a New World screwworm (NWS) detection near the southern border sent futures contracts lower over the week.
“News of a screwworm case in south Texas rattled the markets,” the Cattle Report wrote on Wednesday. “Whether the case is confirmed or only rumored does not seem to matter.”
On the evening of June 3, USDA officials confirmed an NWS case was detected in a 3-week-old calf in Zavala County, TX. Officials are implementing actions found in the NWS Response Playbook, which includes establishing a 12-mile infested zone around the detection and implementing quarantines, movement controls and surveillance.
Live cattle futures lost several dollars, down about $3 on the June contract to $246.62 and down $4 on the August contract to $237.85.
“Unfortunately, unless the fed cash cattle market were to surprise everyone and trade higher this week, a longer lower trend is likely to remain the market’s overarching theme,” wrote ShayLe Stewart, DTN livestock analyst, in her Wednesday midday comments.
Cash trade through Wednesday totaled about 30,000 head. Live steers sold from $255-256, and dressed steers sold from $401-410, averaging $404.42.
Cash trade for the week ending May 31 totaled 56,249 head. Live steers averaged $256.88, and dressed steers averaged $405.25.
Slaughter through Wednesday totaled 323,000 head, compared to 219,000 head a week earlier during the Memorial Day holiday week. Total slaughter for the holiday-shortened week is estimated at 448,000 head. Actual slaughter for two weeks earlier was not released by WLJ press time.
“The struggle with negative margins at the beef plants is creating a operating environment that is not sustainable,” the Cattle Report said. “As fed prices have declined, those negative margins are likely to spread to the feeding sector.”
The outlet continued that retailers are hesitant to sell beef at a loss, so features for other meats are increasing during a time when beef sales should rally.
Boxed beef traded modestly higher over the week, up about $3.50 on the Choice cutout to $395.86 and up a dollar on the Select cutout to $384.43.
Feeder cattle
“Keeping in perfect unison with the live cattle complex, the feeder cattle contracts are also trading lower into Wednesday’s noon hour as the market simply doesn’t see enough immediate support to justify pushing the contracts higher at this point in time,” Stewart said.
Feeder cattle futures closed lower, losing about $11 on the August contract to $342.62 and about $11 on the September contract to $339.32.
The CME Feeder Cattle Index lost $3 to close at $364.26.
Corn futures also traded lower, down 24 cents on the July contract to $4.31 and down 23 cents on the December contract to $4.59.
Iowa: Russell Livestock in Russell sold 1,654 head on Monday. Compared to the last auction, steers mostly sold $13-19 lower. Heifers under 450 lbs. sold $3-15 higher, while heifers over 450 lbs. sold $11-25 lower. Benchmark steers averaging 713 lbs. sold for $390-417, averaging $407.57.
Missouri: Joplin Regional Stockyards in Carthage sold 12,000 head on Monday. Compared to the last sale held two weeks earlier, at the mid-session, feeder steers sold $5-10 lower, except five-weight steers, which sold $3 higher. Feeder heifers sold $5-25 lower. Benchmark steers averaging 773 lbs. sold from $363-380, averaging $370.63.
Oklahoma: Oklahoma National Stockyards in Oklahoma City sold 5,500 head on Monday. Compared to the last sale held two weeks earlier, feeder steers and heifers sold $5-15 lower, with instances of $20 lower. Steer and heifer calves sold $10-20 lower. Benchmark steers averaging 765 lbs. sold from $355-378.50, averaging $364.96.
South Dakota: Sioux Falls Regional in Worthing sold 2,623 head on Monday. Compared to a week earlier, feeder steers and heifers sold steady to $4 higher. Benchmark steers averaging 730 lbs. sold from $397-444, averaging $411.15.
Texas: Giddings Livestock in Giddings sold 1,175 head on Monday. Compared to the last auction, feeder steers under 500 lbs. were steady, while over 500 lbs. sold $3-5 lower. Feeder heifers under 500 lbs. were fully steady, while over 500 lbs. were steady to $3 lower. Benchmark steers averaging 723 lbs. sold for $360-365, averaging $360.73. — Anna Miller Fortozo, WLJ managing editor
