Never mind lower cash fed cattle prices last week—lower yet for scattered sales so far this week—the presumed looming wall of cattle or other various reasons given for the slide in cattle futures and cash prices last week. Cattle futures on Tuesday bounced near-limit higher for many Feeder Cattle and Live Cattle contracts, re-establishing some buffer for key support levels.
There’s little question futures were oversold, but as is so often the case these days, there seemed little definitive to explain the gains. Softer grain prices helped Feeder Cattle. Another apparently large kill last week suggests cattle feeders remain aggressive sellers, maintaining currentness along the way. But still…
Live Cattle futures closed an average of $2.02 higher ($1.00 to $2.70 higher).
Feeder Cattle futures closed an average of $3.56 higher ($3.05 to $3.97 higher).
Choice boxed beef cutout value was 3¢ higher Tuesday afternoon at $198.95/cwt. Select was 57¢ lower at $195.87.
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Major U.S. financial indices closed little changed and narrowly mixed on Tuesday, with many analysts crediting pressure to soggy retail performance.
The Dow Jones Industrial Average closed 5 points higher. The S&P 500 closed 1 point lower. The NASDAQ closed 7 points lower.
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Finally, today, If you happen to be in a part of the world blessed by cooler seasonal temperatures, adequate moisture and ample forage—like Oklahoma—then Derrell Peel, Extension livestock marketing specialist at Oklahoma State University, says cow-calf producers and stocker operators may have added options this fall, given the currently strong value of gain.
“An early start implies the potential for a longer than usual fall-winter grazing period,” Peel explains in his weekly market comments. “This may impact several stocker considerations including purchase weight, quality of animal, gender and the potential for two sets of stockers between now and next March or May.”
For cow-calf producers, Peel adds, “Good forage may allow the possibility of pushing weaning a bit later than usual or retaining calves post-weaning to add weight. At the current time, the value of additional weight tends to be about $1/lb. of gain or higher.”
Of course, value of gain depends on the beginning weight and the amount of weight added.
“For example, average Oklahoma prices for the last three weeks result in a value of gain for 475 lb. steers of $0.91/lb. for 100 lbs. of gain based on beginning price of $175.18/cwt. and a price of $160.45/cwt. for 575 lb. steers,” Peel explains. “However, starting with the 575 lb. steers and adding 100 lbs. results in a value of gain of $1.33/lb. based on a price of $156.29 for 675 lb. steers. Calf prices will likely decline seasonally into the fall and prices by weight may adjust so producers should reevaluate the value of adding weight to calves closer to weaning time.”