As economic concerns continue to increase, all markets are feeling the effects. Futures headed lower over the week, and cash trade was steady to lower with a week earlier.
Live cattle futures traded mostly sideways over the week but ultimately closed slightly lower. The June contract lost 15 cents to close at $131.50, and the August contract lost 75 cents to close at $132.02.
The CME Group has announced it will increase price limits for live and feeder cattle futures starting June 1. The live cattle futures limit will increase from $5/cwt to $5.75/cwt, and the expanded limit will increase to $8.50/cwt. The feeder cattle futures limit will increase from $6.25/cwt to $7/cwt, and the expanded limit will increase to $10.50/cwt.
Through Thursday, cash trade totaled about 83,000 head. Live steers sold between $135-147, with most averaging closer to $142. Dressed steers sold from $223-228, averaging $225.
Cash trade through the week ending May 15 totaled 90,683 head. Live steers averaged $142.53, and dressed steers averaged $228.92.
“This week’s Cattle on Feed report is expected to reflect the first of many declines of cattle on feed,” said the Cattle Report. “The report may show slightly more cattle on feed than the prior year but will start a trendline of declining numbers. The heavy front supplies of fed cattle will gradually work off and should cow slaughter start to decline, the fed supplies will replace cows in some plants that have flexibility.”
The national weekly direct beef type price distribution for the week of May 9-16 was the following on a live basis:
• Negotiated purchases: $142.42.
• Formula net purchases: $143.91.
• Forward contract net purchases: $144.37.
• Negotiated grid net purchases: $142.61.
On a dressed basis:
• Negotiated purchases: $228.91.
• Formula net purchases: $229.80.
• Forward contract net purchases: $225.34.
• Negotiated grid net purchases: $230.30.
Slaughter through Thursday totaled 499,000 head, a few thousand head more than a week earlier. USDA estimates slaughter through May 12 will total 657,000 head. Actual slaughter through the first week of May totaled 661,261 head.
Boxed beef prices made some small gains over the week. The Choice cutout gained about $3.30 to close at $260.47, and the Select cutout gained about $1.65 to close at $246.02.
“There is growing uncertainty as to how low wholesale beef prices will need to go this summer and even next fall before retailers lower prices enough to attract consumers,” wrote Cassie Fish, market analyst, in The Beef. “Retailers were scalded badly by last year’s record high wholesale prices and appear more interested in recouping those losses than much else.”
USDA’s Weekly Export report for the May 6-12 period showed net sales of 23,300 metric tons (mt), down 18 percent from the previous week but up 35 percent from the prior four-week average. Exports were 19,800 mt, unchanged from the previous week but up 1 percent from the prior four-week average. The destinations were primarily South Korea (6,100 mt), Japan (5,300 mt), China (3,100 mt), Mexico (1,400 mt) and Taiwan (1,000 mt).
Feeder cattle
Feeder cattle futures also closed slightly lower over the week, even amid lower corn. The May contract lost $2.75 to close at $154.12, and the August contract lost about $1.30 to close at $165.20.
The CME Feeder Cattle Index lost $3.15 over the week to close at $153.46.
Corn futures traded lower over the week, with both nearby contracts finally below $8. The July contract lost about 8 cents to close at $7.83, and the September contract lost about 13 cents to close at $7.50.
“With the pressure looming over the live cattle market to the point where all the 2022 live cattle contracts, except June, made new lows for the year, the feeder cattle markets had no choice but to turn bearish and set sail for lower price points,” ShayLe Stewart, DTN livestock analyst, said in her Wednesday comments.
Iowa: Russell Livestock in Russell sold 3,947 head Monday. Compared to the previous auction, steer calves 300-650 lbs. sold $2-8 higher, 650-750 lbs. traded $5-8 higher and 750-950 lbs. were firm. Heifer calves 300-650 lbs. sold $3-8 higher, and 650-950 lbs. traded $2-5 lower. Benchmark steers averaging 777 lbs. sold between $151.25-165.25 and averaged $160.58.
Kansas: Winter Livestock in Dodge City sold 1,754 head on Wednesday. Compared to a week earlier, steers 500-975 lbs. sold $5-8 lower. Feeder heifers 600-975 lbs. sold $7-11 lower. Heifers 450-600 lbs. sold steady to $3 higher.
Missouri: Joplin Regional Stockyards in Carthage sold 5,500 head on Monday. Compared to a week earlier, at the mid-session, feeder steers traded steady, and feeder heifers traded steady to $4 lower. Benchmark steers averaging 794 lbs. sold between $155-159, averaging $156.91.
Nebraska: Tri-State Livestock in McCook sold 855 head Monday. Demand was good, but there were not enough sales for a comparison. A group of steers averaging 732 lbs. sold for $150.50.
New Mexico: Clovis Livestock in Clovis sold 1,751 head Wednesday. Compared to the last auction, feeder steers and heifers sold steady to $3 higher. Trade was fairly active on moderate to good demand. Benchmark steers averaging 718 lbs. sold between $150-153, averaging $151.67.
Oklahoma: Oklahoma National Stockyards in Oklahoma City sold 9,800 head on Monday. Compared to the prior sale, feeder steers sold unevenly steady, and feeder heifers sold $3-5 lower. Steer and heifer calves sold $4-8 lower. Benchmark steers averaging 730 lbs. sold between $158-166.25, averaging $163.82.
South Dakota: Sioux Falls Regional Livestock in Worthing sold 546 head on Monday. Compared to a week earlier, there was too light of a test to make a meaningful comparison, but lower undertones were evident. Benchmark steers averaging 726 lbs. sold for $164. — Anna Miller, WLJ managing editor
