Cattle futures settled mostly little changed on Monday, after an early surge. That speaks to current fundamental strength in the wake of Friday’s Cattle on Feed report, as does last week’s sharply higher cash fed cattle trade.
Negotiated cash fed cattle trade last week ended up being $3-$4 higher at $125-$127/cwt., mostly $127. Dressed trade was $5 higher at $200.
After $1.10 higher in spot Feb, Live Cattle futures closed an average of 16¢ higher on Monday, except for 87¢ higher in the back contract.
Feeder Cattle futures closed an average of 20¢ higher, except for 15¢ and 12¢ lower in May and Jan, respectively.
Choice boxed beef cutout value was $2.28 higher on Monday afternoon at $209.11/cwt. Select was $2.30 higher at $204.13.
******************************
On wall Street Monday, major U.S. financial indices closed sharply lower. Depending on whom you listened to, concerns about rising inflation and interest rates were part of the pressure, though nothing much changed since Friday when equities surged sharply higher. Instead, perhaps it was a breather and profit taking as investors consider news slated for this week that includes the monthly employment report and State of the Union address.
The Dow Jones Industrial Average closed 177 points lower. The S&P 500 closed 19 points lower. The NASDAQ closed 39 points lower.
*****************************
“The heifer feedlot inventory swelled sharply in the last half of 2017 and indicates slowing heifer retention,” says Derrell Peel, Extension livestock marketing specialist at Oklahoma State University, in his weekly market comments. “However, it should be noted that the ratio of steer to heifer slaughter in 2017 was still well above long-term average levels, meaning that growing heifer feedlot inventories relative to steers is really just getting back to more typical levels of heifer feeding after sharp reductions due to drought and herd expansion since 2012.”
Peel points out that the 7.34 million head of steers on feed Jan. 1, according to Friday’s Cattle on Feed report, is 4.5% more than a year earlier and the most since 2008. The 4.15 million heifers on feed are 15.9% more than last year and the most since 2012.
“In the last five months of 2017, feedlot placements exceeded marketings by 506,000 head,” Peel says. “These additional cattle will be marketed in the first 4-6 months of 2018.”