The market continued to trade mostly steady over the week, with feedlots holding out for higher cash prices. Futures traded mostly sideways, but feeder cattle slipped a bit.
Live cattle futures traded mostly steady over the week. The October contract gained $1.20 to close at $145.32, and the December contract gained 10 cents to close at $147.87.
“Feedlots know that packers are hungry for cattle and have thus held strong in waiting the week out for potentially higher prices,” ShayLe Stewart, DTN livestock analyst, wrote in her Wednesday midday comments.
Through Thursday, about 60,000 head traded on the cash market. Live steers sold from $144-148, and dressed steers sold from $227-230.50.
Cash trade for the week ending Oct. 2 finally totaled a sizable amount at 100,258 head. Live steers averaged $144.95, and dressed steers averaged $229.21.
“Fed cattle prices may be the highest since 2015 but cattle are losing money and record high cost of gain values are taking a terrible toll,” said Cassie Fish, market analyst, in The Beef.
The national weekly direct beef type price distribution for the week of Sept. 26 to Oct. 3 was the following on a live basis:
• Negotiated purchases: $144.88.
• Formula net purchases: $146.81.
• Forward contract net purchases: $147.07.
• Negotiated grid net purchases: $145.84.
On a dressed basis:
• Negotiated purchases: $228.99.
• Formula net purchases: $231.52.
• Forward contract net purchases: $228.29.
• Negotiated grid net purchases: $230.26.
“Slaughter volumes for the past two months have exceeded prior year each week. Saturday slaughter volumes have moderated and are an important control point for processors as they regulate supplies to stabilize prices,” according to the Cattle Report.
Slaughter through Thursday was about 510,000 head, a few thousand head more than the same time a week earlier. Slaughter for the week prior is projected at 664,000 head. Actual slaughter for the week ending Sept. 24 was 671,224 head. Dressed steer weights were 915 lbs.
“Activity in the country is very slow,” Fish said. “Net packer margins slipped under $100 per head for the first time since Q1 2020 last week. Boxed beef values are expected to bottom this week and begin a seasonal increase, but no doubt packers are (eyeing) cattle costs, throughput and margin management in a way they haven’t had to in a very long time.”
Boxed beef prices traded mixed over the week. The Choice cutout gained $1.28 to close at $247.36, and the Select cutout lost about $2.80 to close at $216.99.
“The cash cattle market’s ability to trade cattle higher this week is helping lessen the pain of the morning’s (export) report,” Stewart said on Thursday morning. Beef net sales of 16,400 metric tons (mt) for 2022 were mostly for South Korea (6,000 mt), Japan (2,200 mt) and Mexico (2,200 mt).
Feeder cattle
“The past two weeks have witnessed weather and grain prices as major factors in price determination for stocker and feeder cattle,” the Cattle Report wrote. “The nation’s corn crop is now in the midst of harvest and the price is sky high from any historical perspective.”
Feeder cattle futures were lower over the week. The October contract lost 25 cents to close at $175.72, and the November contract lost $1.40 to close at $176.42.
The CME Feeder Cattle Index gained 25 cents to close at $175.69.
“Early August rains in the southern plains promised bountiful winter grazing and caused a surge in calf prices,” the Cattle Report continued. “Currently the combination of high feed cost and returning drought in the southern plains is causing a reset in replacement prices.”
Corn futures were slightly higher over the week. The December contract gained 7 cents to close at $6.75, and the March contract also gained 7 cents to close at $6.83.
Kansas: Winter Livestock in Dodge City sold 1,750 head on Wednesday. Compared to a week earlier, there were not enough cattle in each weight group for a market trend. Benchmark steers averaging 769 lbs. sold from $160.50-170, averaging $167.58.
Missouri: Joplin Regional Stockyards in Carthage sold 5,000 head on Monday. At the mid-session, feeder steers and heifers were trading steady with a week earlier. Benchmark steers averaging 774 lbs. sold between $171-179.75, averaging $176.31.
Oklahoma: Oklahoma National Stockyards in Oklahoma City sold 8,500 head on Monday. Compared to a week earlier, feeder steers sold $1-3 lower, and heifers sold mostly steady. Demand was moderate to good for feeder cattle. Benchmark steers averaging 778 lbs. sold from $165-173.50, averaging $169.36.
Nebraska: Bassett Livestock in Bassett sold 3,770 head Wednesday. The auction consisted of weaned and nonweaned spring calves and yearlings. Comparable steer offerings 900-1,000 lbs. traded steady. Benchmark steers averaging 740 lbs. sold between $186.50-188 and averaged $186.96.
South Dakota: Sioux Falls Regional Cattle Auction in Worthing sold 2,845 head Monday. Compared to the last auction, there were limited price comparisons, as there were few steers and heifers with similar weights to the last sale. Feeder steers 600-650 lbs. sold steady to $2 lower, 700-750 lbs. and 900-950 lbs. were steady to $1 higher, and other weights were not well compared. Feeder heifers 700-800 lbs. sold steady to $3 lower, with other weights not well compared. Benchmark steers averaging 768 lbs. sold between $174.50-187.25 and averaged $180.48. — Anna Miller, WLJ managing editor
