There were only 359 head offered—two lots of Kansas heifers—in the weekly Fed Cattle Exchange Auction, but 280 head sold for a weighted average price of $109.50 (delivery at 1-9 days). That’s 50¢ lower than most of the country trade in the region last week.
“Packers are buying cattle in the country at $109.00-$109.50 and were not willing to push any higher than that at the auction,” said the AMS reporter on hand at Sioux Falls Regional Livestock in South Dakota. Choice 2-4 steers brought $108-$109.25 at the auction with estimated dressed cost of $173-$175, some to $176.
Likewise, Ch 2-4 steers brought $109.41-$110.44 at Tama Livestock Auction in Iowa.
Though too few to trend, USDA reported country trade in the region at $108-$110, which was steady to $1 lower than the previous week. Trade in the Northern Plains continued 50¢ to $1.00 lower at $109.00-$109.50.
Although closing above session lows, Cattle futures sagged lower from the outset Wednesday. Commodities had a rough day, in general. Some chalked pressure up to lower outside markets and uncertainty surrounding trade. Others suspect it was mostly algo-trading in the driver’s seat.
Live Cattle futures closed an average of $1.25 lower (67¢ to $1.57 lower).
Except for 47¢ lower in spot Aug, Feeder Cattle futures closed an average of $2.03 lower.
Wholesale beef values were firm on Choice and steady on Select with light to moderate demand and offerings, according to the Agricultural Marketing Service.
Choice boxed beef cutout value was 47¢ higher Wednesday afternoon at $214.04/cwt. Select was 11¢ lower at $203.97.
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Major U.S. financial indices closed mixed Wednesday with continued strong quarterly earnings providing a counterweight to concerns about the President’s legal troubles.
The Dow Jones Industrial average closed 88 points lower. The S&P 500 closed 1 point lower. The NASDAQ was up 29 points.
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Projected feedlot returns continue on the negative side (cash to cash basis) through the rest of the year, but are significantly more robust than expectations just a few months ago, according to the August Historical and Projected Kansas Feedlot Net Returns.
For instance, projected steer closeouts increase from an estimated -$109.31 per head in July ($82.95/cwt. FCOG*) to -$10.31 in December ($83.94 FCOG).
Likewise, projected heifer closeouts increase from an estimated -$79.18 in July ($88.80 FCOG) to -$11.75 in December ($90.46 FCOG).
“Returns for August-October improved from last month, mainly reflecting increased fed cattle price expectations,” says Glynn Tonsor, agricultural economist at Kansas State University, author of the report.
*Feeding Cost of Gain