The cattle market turned lower this week, with futures contracts retreating from recent highs due to cautious technical trading.
Live cattle futures for the week were lower. The August contract lost about $5 to close at $233.35, and the October contract lost about $6 to close at $226.82.
“The market is struggling this morning as the week’s export report was lousy and traders are holding their breath, waiting to see if the complex falls below last Friday’s close, which would be a bearish technical signal,” wrote ShayLe Stewart, DTN livestock analyst, in her Thursday midday comments.
The previous Friday, cattle futures struggled as many traders elected to sell their positions. Live cattle futures were close to hitting limit down, while feeder cattle futures succeeded in hitting limit down levels.
“What happened throughout Friday’s trade is now done, and the next real question becomes: What’s next? Could Thursday’s record high close have been the high score for this bullish fundamental run? Or will the market regain its focus in the days/weeks to come and again trade higher?” Stewart asked on Friday afternoon. “As always, time will tell, but demand will have a big influence on how things pan out.”
Cash trade through Thursday totaled about 19,000 head. Live steers sold from $240-246, and dressed steers sold from $376-385.
Total cash trade for the week ending Aug. 10 was 55,791 head. Live steers sold from $233-245, and dressed steers sold from $374-385.
“The physical side of the market was already appearing seasonally toppy before today’s futures’ antics,” wrote Cassie Fish, market analyst, in The Beef on Thursday. “A setback in both cash cattle prices and boxed beef prices in late August and early September is normal.”
Slaughter through Thursday totaled about 446,000 head, compared to 447,000 head a week earlier. Total slaughter for a week earlier is expected at 536,000 head. Actual slaughter for the week ending Aug. 2 was 536,919 head. The average steer dressed weight was 941 lbs., the same as a week earlier.
“Some packers have ‘backed up bids’ now, thanks to the lower futures prices,” Fish said. “Packer margins remain very negative and their production schedules the smallest since 2015.”
Boxed beef prices continue to gain ahead of the Labor Day weekend holiday. The Choice cutout gained about $15 to $393.79, and the Select cutout gained about $13 to $366.88.
Early estimates for USDA’s Cattle on Feed report expected on Friday, Aug. 22 peg cattle on feed for July at 98% of last year. Marketings are expected at 94% of 2024, and placements at 92%.
Feeder cattle
Feeder cattle futures were lower over the week. The August contract lost about $8 to close at $340.40, and the September contract also lost about $8 to $341.02.
“Traders believed that was the best route to send the feeder cattle contracts as well,” Stewart said. “Again, this decision is solely one being made on technical indications as demand in the countryside remains nearly unfathomable for feeder cattle.”
The CME Feeder Cattle Index gained close to $8 to close at $344.09.
Corn futures also saw declines. The September contract lost 9 cents to close at $3.75, and the December contract lost 10 cents to close at $3.97.
Missouri: Joplin Regional Stockyards in Carthage sold 8,000 head on Monday. Compared to the previous sale, feeder steers sold steady to $12 higher and feeder heifers sold steady to $8 higher. Benchmark steers averaging 771 lbs. sold from $336-348, averaging $343.58.
Oklahoma: Oklahoma National Stockyards in Oklahoma City sold 5,600 head on Monday. Compared to a week earlier, feeder steers sold $10-15 higher, except over 800 lbs. sold mostly steady to $3 lower. Feeder heifers sold $5-10 higher. Steer calves sold steady to $4 higher, and heifer calves under 500 lbs. sold $4-8 lower while over 500 lbs. sold $5 higher. Benchmark steers averaging 764 lbs. sold from $339-363, averaging $358.02. — Anna Miller Fortozo, WLJ managing editor
