The markets are continuing their third day of growing momentum, with support flooding in to the cash cattle market.
“There's some pressure being seen in the deferred feeder cattle contracts, but the markets are thriving off the momentum that's building in the cash cattle market,” remarked Elaine Kub, DTN analyst, in her midday comments.
Live cattle contracts were roughly half a dollar higher: The April contract was up 42 cents to $123.15 and the June contract was up 65 cents to $125.27.
A sizable amount of cash trade took place today. A total of 32,258 head sold between $118-123, averaging $120.52. Dressed steers sold for $195. On the formula side, 18,500 head averaging 842 lbs. sold for $187.17.
The Fed Cattle Exchange held its weekly sale, and many sold over their reserve pricing. A total of 4,926 head were listed, of which 3,489 actually sold; 1,437 head were listed as unsold, as they did not meet the reserve prices that ranged from $119.50 to $122, Kub reported. Opening prices ranged from $117.75-122 and high bids ranged from $119-122.75.
“If packers are willing to give $3 to $4 higher Wednesday, what do you think they'll be willing to offer come Thursday or Friday?” Kub wondered. “Boxed beef prices aren't seeming to show any signs of weakening, and with warm weather in the forecast, grilling season is here, my friends, and packers need your cattle.”
Boxed beef prices were several dollars higher. The Choice cutout was up $3.54 to $266.31 and the Select cutout was up $3.89 to $255.19 on 117 loads.
Today’s slaughter is projected at 120,000 head, compared to last week’s 119,000 head and last year’s COVID-impacted 101,000 head.
Feeder cattle also saw some momentum today. The April contract was up $1.15 to $147.62 and the May contract was up 90 cents to $152.67. CME reported its latest Feeder Cattle Index up 28 cents to $139.98. Corn was also up today, with the May contract up 6 cents to $5.60.
“If cash cattle can keep trading higher, the feeder cattle market should only continue to become more and more bullish as higher-fat cattle prices give buyers an incentive to buy calves,” Kub noted, regardless of higher corn prices.
Colorado: Winter Livestock in La Junta sold 5,491 head Tuesday. Compared to the prior sale, feeder steers under 700 lbs. sold $5-8 higher, with instances of $10-15 higher; over 700 lbs. sold $3-5 higher. Feeder heifers under 500 lbs. sold $3-5 higher; 500-700 lbs. sold $2-4 higher; over 700 lbs. sold steady to $2 higher. Benchmark steers averaging 767 lbs. sold between $136-143.75.
New Mexico: Roswell Livestock Auction in Roswell sold 1,047 head Tuesday. Compared to the previous sale, steers under 450 lbs. sold $10 higher; steers over 450 lbs. sold mostly steady. Heifers under 500 lbs. sold $2-6 higher; heifers over 500 lbs. sold steady. Benchmark steers averaging 729 lbs. sold between $117-122. — Anna Miller, WLJ managing editor