When all was said and done last week, negotiated cash fed cattle sales were generally $2-$4 higher on a live basis at $121-$122/cwt. in the Southern Plains; $119-$124 in the Northern Plains; $122-$125 in the western Corn Belt. Dressed trade was $5 higher at $195 in Nebraska and the western Corn Belt.
The weekly 5-Area Direct average had steers $2.22 higher at $121.71 on a live basis and $1.87 higher in the beef at $191.84. Similar trends and prices for heifers.
Cash strength and the lack of negative surprise in Friday’s Cattle on Feed report, helped traders continue pushing Cattle futures higher on Monday.
After $2.37 higher in spot Apr, Live Cattle futures closed an average of 99¢ higher.
Feeder Cattle futures closed an average of $1.82 higher ($1.27 to $2.62 higher).
Wholesale beef values finally found some spark on Monday. Choice boxed beef cutout value was $3.35 higher in the afternoon at $215.11/cwt. Select was $1.59 higher at $201.72.
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Major U.S. financial indices closed narrowly mixed on Monday, with continued pressure from tech stocks and worries about inflation.
The Dow Jones Industrial Average closed 14 points lower. The S&P 500 closed fractionally higher. The NASDAQ closed 17 points lower.
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March feedlot placements were significantly lower year over year—9.26% less—, but Derrell Peel, Extension livestock marketing specialist at Oklahoma State University reminds that the overall supply of cattle remains unchanged.
“Decreased March placements are not an indication of fewer total cattle supplies but rather are a confirmation of the change in feedlot timing in recent months,” Peel explains in his weekly market comments. “Larger, drought-enhanced placements in recent months built feedlot inventories and set the stage for larger than normal seasonal peak marketings in May and June.”
Although heifers represent an increasing percentage of the on-feed mix, Peel points out that heifer slaughter continues at non-liquidation rates.
“In the past 12 months, heifers represented an average of 34.3% of total steer and heifer slaughter. Over the course of a cattle cycle, heifers account for about 37% of total yearling slaughter, a level that generally represents a stable herd size. This percentage varies from roughly 31% during rapid herd expansion to about 40% during herd liquidation. The current level of heifer slaughter is up from a recent low of 31.4% in mid-2016 but is still less than the long-term average and certainly below levels that would suggest herd liquidation. Heifer slaughter is increasing but is still at a level that suggests limited but slightly positive herd growth.”