Finally, in a bout of much-longed for optimism, cattle markets were able to secure some momentum. Futures, especially for feeder cattle, surged higher. Cash trade has begun to pick up in volume, although it continues to trade generally steady, at a high of $124.
Live cattle futures were mostly in the green all week for a nice change. The October contract did lose about $4 in a week to close at $125.27, but the December contract came through with an almost $5 gain to close at $130.10.
“Although prices still have a long way to move before testing long-term resistance, the continued support building in the market is pointing to seasonal lows being set in the cattle complex,” wrote Rick Kment, DTN contributing analyst, in his Thursday comments.
Cash trade picked up its pace for the second week in a row, hopefully leading to higher prices on the horizon. Prices were generally steady, and volume as of Thursday afternoon was already sitting at 77,000 head. Live steers traded mostly between $122-124, and dressed steers sold between $193-195.
Cash trade through the first weekend of October totaled 93,428 head, exponentially more than in previous weeks. Live steers averaged $122.60, and dressed steers averaged $195.24.
The Fed Cattle Exchange listed 2,371 head for their weekly online sale. A total of 414 head actually sold. Texas sold 295 head for $124.25, and Oklahoma sold 119 head for $123.
The national weekly direct beef type price distribution for the week of Sept. 27 to Oct. 4 was the following on a live basis:
• Negotiated purchases: $122.69.
• Formula net purchases: $127.
• Forward contract net purchases: $127.84.
• Negotiated grid net purchases: $128.87.
On a dressed basis:
• Negotiated purchases: $195.20.
• Formula net purchases: $201.90.
• Forward contract net purchases: $197.14.
• Negotiated grid net purchases: $201.51.
“With all plants running this week, (there is) optimism that this week’s slaughter level will exceed 650K head and possibly push 660K head, making up for the last couple of week’s underperformance,” wrote Cassie Fish, market analyst, in The Beef, on Wednesday.
“It’s a good thing, as the next couple of weeks will see more plant maintenance chipping away at weekly throughput.”
Slaughter through Thursday totaled 483,000 head, about 10,000 head more than a week earlier. Slaughter through Oct. 4 is expected to be 637,000 head, and actual slaughter through Sept. 25 was 642,571 head.
Boxed beef prices are steadily coming down. The Choice cutout lost nearly $10 over a week to close at $285.30, and the Select cutout lost about $5 to close at $264.44.
Feeder cattle futures found some momentum and ran with it last week. The October contract closed about $8 higher at $160.35, and the November contract gained $9 to close at $161.60. The CME Feeder Cattle Index gained a couple of pennies to close at $153.80.
Corn continues to trade sideways, with the December and March contracts virtually unchanged at $5.34 and $5.43, respectively.
“Despite the focus on higher-than-expected cattle numbers during the last couple of months, the outlook for tighter overall cattle supplies once yearly totals are calculated is still pointing to a contracting beef herd,” Kment said.
“With strong underlying gains redeveloping in stock prices, less focus on dramatic economic pressure will only help support expectations of stronger beef demand through the next several months.”
Colorado: Winter Livestock in La Junta sold 1,595 head Tuesday. Compared to a week earlier, steer and heifer calves sold unevenly. Steer calves under 600 lbs. sold $2-3 higher, and 600-700 lbs. sold $2-3 lower. Heifer calves under 500 lbs. sold mostly steady, and 500-600 lbs. sold $5-8 lower. Yearling feeder steers and heifers over 700 lbs. were lightly tested. A group of unweaned steers averaging 672 lbs. sold between $136-142.50, averaging $140.38.
Iowa: Russell Livestock in Russell sold 1,409 head Monday. Compared to two weeks prior, 700-850 lb. steers were mostly $4-7 lower, and 850-900 lb. steers finished $6 higher. Heifers 600-750 lbs. were $3-8 lower. Benchmark steers averaging 783 lbs. sold between $151.50-161, averaging $157.06.
Missouri: Joplin Regional Stockyards in Carthage sold 4,000 head Monday. Compared to a week earlier, steers traded steady. Feeder heifers traded $2-4 lower on weights under 700 lbs., and over 700 lbs. sold steady to $3 higher. Benchmark steers averaging 766 lbs. sold between $150-158, averaging $153.74.
New Mexico: Roswell Livestock in Roswell sold 1,310 head on Monday. Compared to the previous auction, there was not an accurate comparison on feeder steers and heifers or calves, but a lower undertone was noted due to very limited offerings of weaned calves. A group of steers averaging 656 lbs. sold between $140-147.50 and averaged $141.11.
Oklahoma: Oklahoma National Stockyards in Oklahoma City sold 6,000 head Monday. Compared to a week earlier, feeder steers sold steady to $3 higher, and feeder heifers sold steady to $2 lower. Steer and heifer calves sold unevenly steady. Benchmark steers averaging 777 lbs. sold between $152.50-158, averaging $152.70.
South Dakota: Sioux Falls Regional Cattle Auction in Worthing sold 1,305 head Monday. Compared to a week earlier, feeder steers and heifers sold unevenly steady. Lighter weights under 800 lbs. sold with lower undertones, and weights over 800 lbs. sold with higher undertones. A group of benchmark steers averaging 789 lbs. sold for $148.75. — Anna Miller, WLJ managing editor