Early negotiated cash fed cattle prices were a mixed bag on Wednesday.
Direct trade in the Texas Panhandle was reported at $110/cwt. on a live basis, which was $1 less than last week. That was on moderate demand and light to moderate trade.
Fat cattle auctions in the north trended higher.
For instance, Slaughter steers sold steady to $1 higher at Sioux Falls Regional Livestock in South Dakota with instances of $2 higher. Slaughter heifers sold steady to $1 higher.
Choice steers sold $1.75-$2.00 higher at Tama, Iowa (mostly $113.95). Heifers traded $1.00-$1.75 higher (mostly $113.85).
There were only 919 head offered in the weekly Fed Cattle Exchange auction. Of those 230 head (two lots of heifers from Kansas) sold for a weighted average price of $109/cwt. with delivery at 1-9 days. There were no sales there last week for a trend.
Cattle futures closed mixed on Wednesday, rebounding some from early pressure.
Live Cattle futures closed an average 39¢ higher in the front five contracts (17¢ to 67¢ higher) and then unchanged to 47¢ lower.
Except for 37¢ higher in spot October, Feeder Cattle futures closed an average of 50¢ lower (27¢ to 70¢ lower).
Choice boxed beef cutout value was 40¢ lower Wednesday afternoon at $197.26/cwt. Select was 76¢ lower at $189.09.
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Major U.S. financial indices closed higher on Wednesday, led by a bounce in the DJIA, driven in part by stronger than expected quarterly results from IBM.
The Dow Jones Industrial Average closed 160 points higher. The S&P 500 closed 1 point higher. The NASDAQ closed fractionally higher.
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“Despite the sizable number of cattle outside feedlots, medium-frame feeder steers in Oklahoma City averaged $148.12/cwt. in the third quarter, which is $7.48 higher than the same period last year,” according to analysts with USDA’s Economic Research Service (ERS), in the monthly Livestock, Dairy and Poultry Outlook released on Wednesday. “Winter grazing opportunities in the Southern Plains are likely encouraging increased demand by stockers, which should support feeder calf prices. Fourth-quarter prices are raised from last month to $143-$147/cwt., reflecting firm demand by both backgrounders and feedlots. First-half 2018 prices are raised from last month as well.”
On the other side of the trade, ERS analysts note that increasing cattle numbers are keeping fed cattle prices near year-ago levels.
“Recent large supplies of market-ready cattle have prevented the USDA 5-area fed steer price from rebounding off recent lows,” say ERS analysts. “In July, the monthly weighted average price for fed steers was $118.45/cwt. and trended lower through September to $107.11/cwt. for a quarterly average of $112.46/cwt. The third-quarter estimate is slightly below prices last year, but the latest weekly price of $109.45/cwt. (Oct. 6) is about 8% higher than the same week last year. As a result, fourth-quarter fed steer price is unchanged from last month to $108-$112/cwt., staying above 2016 for the quarter.”