Market bears had their way on Tuesday, with continued follow-through pressure in Cattle futures, skittishness over heavy supplies and sliding fed cattle prices.
Negotiated fed cattle trade was at significantly lower prices on Tuesday. Early live trade in Nebraska was mostly $7 lower than last week at $115/cwt., with a few up to $117; that was on light to moderate trade and light demand. Early dressed purchases in the western Corn belt traded at mostly $184, which was $4-$9 lower than last week. Live sales in the western Corn Belt so far this week are at mostly $121-$122, in the middle of the previous week’s trading range.
Live Cattle futures closed an average of $1.25 lower (87¢ to $1.65 lower in spot Jun). That’s an average of $3.25 lower in the last two sessions.
Feeder Cattle futures closed an average of $1.84 lower ($1.60-$2.02 lower). That’s an average of $4.50 lower over the last two days.
Choice boxed beef cutout value was 48¢ lower Tuesday afternoon at $231.64/cwt. Select was 39¢ higher at $209.51. Select and Choice rib and loin cuts sold steady to firm, while chuck and round cuts traded steady to weak, according to the Agricultural Marketing Service. Beef trimmings sold sharply lower on light demand and offerings.
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Major U.S. financial indices closed solidly lower on Tuesday, under pressure from an assortment of news, including a surge in interest rates and a month-to-month decline in consumer retail sales. According to the U.S. Commerce Department, U.S. food services and retail sales increased 0.3% in April, down from the 0.8% increase a month earlier.
The Dow Jones Industrial Average closed 193 points lower. The S&P 500 closed 18 points lower. The NASDAQ closed 59 point lower.
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The nation’s pasture and range is off to a poorer year-over-year start, as expected, given the long winter and wide swaths of dry conditions.
According to the most recent USDA Crop Progress report, 43% of pasture and range is in Good (37%) or Excellent (6%) condition, compared to 72% last year, which was historically high. 20% is rated as Poor (15%) or Very Poor (5%) compared to 10% last year. That’s the worst first week of the reporting season since 2014, according to the Livestock Marketing Information Center (LMIC).
In the latest Livestock Monitor, LMIC analysts add that the hay stock as of May 1 were the lowest since 2013.
“Nearly half of U.S. states saw declines of 30% or more in hay stocks. Only 16 states showed higher year-over-year May 1 stocks,” LMIC analysts say. “In critical drought areas of Texas and Oklahoma, declines were over 50%…Surrounding states also have large declines in inventory. Louisiana was down 63%, Missouri fell 61%, and Kansas by 30%. In most of the U.S., tight hay stocks will support new-crop hay prices, at least in the near-term.”
For most other crops, producers made significant strides in planting last week.
For instance, 62% of the corn is planted, which is 6% less than last year but just 1% less than the 5-year average.