Markets have continued to trade in a mostly sideways pattern, unable to break out from packers’ domination in the market. Boxed beef prices are still riding out record highs, but look to be slowing down. Slaughter capacity and utilization remain the defining factor in prices right now.
Live cattle contracts were down about $1 from the week earlier, with the June contract at $116.35 and the August contract at $119.42.
As Cassie Fish, market analyst in The Beef put it, live cattle futures are “boring, light volume, small range—supported by cash cattle prices, which are in turn supported by boxed beef prices. [Thursday] has the feel of an inside day with a higher close, holding support and unable to penetrate resistance. In other words, marking time action.”
Cash trade throughout the week took place mostly on Tuesday and Wednesday, with live steers selling between $116-120.50 and dressed steers between $188-192. Negotiated trade for the week prior totaled 82,209 head. Live steers averaged $119.73 and dressed steers averaged $190.62. Formula cattle continue to see a premium, selling in the mid-$190s range.
“Packer margins remain huge and optics continue to support cash prices and that will continue to be the case until boxed beef prices fall significantly,” Fish said. “Even then, the packer is unlikely to pummel cash prices regardless, due to the number of eyeballs watching the sector.”
The Fed Cattle Exchange held a special auction Wednesday, listing 15,237 head. Of that, only 1,419 head sold—1,081 head were listed as scratches and 12,737 head were unsold. Opening prices ranged from $100-119 and high bids ranged from $100-117. The exchange listed another 10,371 head for sale Thursday, of which none sold. Opening prices ranged from $114.50-118 and high bids ranged from $115-119.
Slaughter through Thursday totaled 478,000 head, a couple thousand head ahead of the previous Thursday. With Memorial Day on the following Monday, processors were likely trying to get ahead of schedule.
The week prior’s slaughter is estimated at 669,000 head—finally enough head to get processing speed up to meeting summer demand. Saturday’s May 22 slaughter was projected at 78,000 head, the second largest Saturday kill since COVID. USDA released the total slaughter numbers for the week ending May 15, which still only totaled 643,910 head.
Boxed beef prices have begun to slow their roll, although they are still topping out at record-high prices, second to peak-COVID prices. The Choice cutout was sitting at $329.98 and the Select cutout at $304.10 as of Thursday.
Beef exports were up 19 percent from the previous week and 45 percent higher than the four-week average. Sales totaled 27,900 metric tons, with China, Japan and South Korea coming in as the top three buyers.
Feeder cattle
Corn remained relatively steady over the past week, but skyrocketed limit up on Thursday, gaining 40 cents to close at $6.64. Feeder cattle didn’t stand a chance against the sudden increase, and lost several dollars on later contracts.
The May contract lost 20 cents Thursday to close at $136.30 but the August contract was down $2.35 to $152.85. This was still comparable to the Friday before, with the contracts closing the week out at $137.33 and $153.70, respectively. CME reported its Feeder Cattle Index up several dollars from the week prior to $136.57.
“The relationship of feeder prices to grain and fed prices is a delicate one,” read the Cattle Report. “If the processing sector is characterized by under-capacity, the feeding sector is the opposite.
“As beef demand has increased domestically and globally, cattle feeding companies have expanded by adding new pen space. As the herd shrinks, those feeding companies will need to compete for available supply of feeder cattle.”
Colorado: Winter Livestock in La Junta sold 665 head Tuesday. Compared to the prior sale, feeder steers and heifers were too lightly tested although a higher undertone was noted. A group of steers averaging 726 lbs. sold for $138.
Iowa: Russell Livestock in Russell sold 3,204 head on Monday. Compared to the last auction, steer calves under 600 lbs. sold $6-7 higher, steers over 600 lbs. mainly were $2-7 higher. Heifer calves under 600 lbs. were mostly $6-9 higher, while those over 600 lbs. sold steady to $6 higher. Benchmark steers averaging 763 lbs. sold between $148.75-153.50.
Kansas: Winter Livestock in Dodge City sold 1,674 head Wednesday. Compared to the previous sale, feeder steers 800-1,000 lbs. sold $4-5 higher, Feeder heifers 400-900 lbs. sold $5-8 higher. A group of fancy steers averaging 769 lbs. sold for $141.25.
Missouri: Joplin Regional Stockyards in Carthage sold 6,000 head Monday. Feeder steers traded $3-6 higher and feeder heifers sold $4-7 higher compared to the last sale. Benchmark steers averaging 754 lbs. sold for $138-140.
New Mexico: Roswell Livestock in Roswell sold 1,017 head on Monday. Compared to the previous auction, steer calves under 600 lbs. sold $1-2 lower, feeders over 600 lbs. were $3-9 higher on comparable quotes. Heifer calves under 500 lbs. sold $4 lower, calves and feeders over 500 lbs. were $2 higher, with instances of $6 higher on 600-650 lbs. offerings. A small group of steers averaging 626 lbs. sold between $151.00-163.00.
Oklahoma: Oklahoma National Stockyards in Oklahoma City sold 8,500 head Monday. Compared to the previous week, feeder steers sold $1-2 higher and feeder heifers $3-6 higher. Benchmark steers averaging 767 lbs. sold for $130-144.75.
South Dakota: Sioux Falls Regional Cattle Auction in Worthington sold 5,819 head on Monday. Compared to the previous auction, feeder steers sold $1-4 higher except 700-750 lbs. were steady to $2 lower and 800-850 lbs. sold steady to $1 higher. Heifers were steady to $2 higher, with the exception of 550-600 lbs., which sold $3-6 higher. Benchmark steers averaging 769 lbs. sold between $137.50-154 and averaged $147.55. — Anna Miller, WLJ managing editor
