Friday’s bearish Cattle on Feed report took Cattle futures down a peg on Monday.
Feeder Cattle futures closed an average of $1.78 lower ($1.25 to $2.57 lower), and Live Cattle futures closed an average of $1.83 lower (72¢ lower toward the back to $3.35 lower in spot Apr).
Negotiated cash fed cattle trade opened the week at steady money of $140/cwt. in the Texas Panhandle on moderate trade and light demand. Elsewhere, trade was mostly inactive on light demand with too few transactions to trend, according to the Agricultural Marketing Service.
Last week, live prices were $1 higher in the Southern Plains at $140/cwt., $4 higher in Nebraska at $144-$146, $3-$4. higher in Colorado at $144-$145 and $3 higher in the western Corn Belt at $145-$146. Dressed prices were $4 higher at $230.
The weighted average five-area direct steer price last week was $2.00 higher on a live basis at $143.02/cwt. The average dressed steer price was $6.40 higher at $232.29.
Corn futures closed mostly 7¢ to 14¢ higher, but Soybean futures closed 10¢ to 12¢ lower through Jan ‘23 and then mostly 3¢ to 9¢ lower.
Wholesale beef prices were mixed with Choice Boxed beef cutout value $1.31 lower Monday afternoon at $266.60/cwt. , while Select was $1.75 higher at $256.52.
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Major U.S. financial indices clawed back some of the previous session’s steep losses on Monday, amid another volatile day of trade and supported by positive quarterly corporate earnings reports.
The Dow Jones Industrial Average closed 238 points higher. The S&P 500 closed 24 points higher. The NASDAQ was up 165 points.
West Texas Intermediate Crude Oil futures closed $2.68 to $3.53 lower through the front six contracts, apparently pressured by slowing economic growth that could be compounded by the recent COVID outbreak in China.
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“The unexpectedly large March feedlot placement total may indicate unusual movement of feeder cattle out of the country. It is possible that some heifers originally designated as replacements on Jan. 1 are already being diverted to feedlots,” says Derrell Peel, Extension livestock marketing specialist at Oklahoma State University, in his weekly market comments.
As noted in the last issue of Cattle Current, according to the latest monthly Cattle on Feed report (feedlots with 1,000 head or more capacity), March feedlot placements were slightly less (-8,000 head) than a year earlier at 1.99 million head. However, pre-report expectations expected a decrease of about 8%, based on auction totals and other data.
Peel notes the largest increase in placements occurred in Nebraska (+6.8%), while placements were even with the previous year in Kansas and Colorado. Placement were lower year over year in Texas (-6.5%) and Iowa (-10.7%).
“As May approaches and widespread drought conditions persist, cattle industry impacts are expected to accelerate in the coming weeks,” Peel says. “However, there are indications that drought is already impacting cattle markets significantly.”