Cattle futures took a breather Wednesday on likely profit taking and awaiting weekly cash direction.
Feeder Cattle futures closed an average of 61¢ lower.
Live Cattle futures closed narrowly mixed, from an average of 42¢ lower to unchanged to an average of 2¢ higher.
Wholesale beef prices declined on Wednesday for the first time in a while. Choice boxed beef cutout value was $1.12 lower in the afternoon at 287.83/cwt. Select was $2.82 lower at $276.43/cwt.
By all accounts, negotiated cash fed cattle trade remained stuck in the gate Wednesday. There was no afternoon USDA summary available at press time.
Last week, live prices were mostly at $164/cwt. in all regions. Dressed prices were $260-$262.
Grain and Soybean futures found some footing Wednesday.
Corn futures closed mostly fractionally lower to 1¢ lower, except for 3¢ to 11¢ higher in old-crop contracts.
KC HRW Wheat closed 1¢ to 5¢ higher through Sep ’24 and then fractionally lower to 2¢ lower.
Soybean futures closed 10¢ to 15¢ higher through May ’24 and then mostly 4¢ to 5¢ higher.
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Major U.S. financial indices closed narrowly mixed Wednesday, pressured once again by rising bond yields.
The Dow Jones Industrial Average closed 5 points higher. The S&P 500 closed 18 points lower. The NASDAQ was down 76 points.
West Texas Intermediate Crude Oil futures (CME) closed 64¢ to 69¢ higher through the front six contracts.
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Although beef stocks in cold storage Jan. 31 were 2% less than the previous month, they were 1% more year over year and remain historically large, according to David Anderson, Extension livestock economist at Texas A&M University.
“Cold storage stocks of beef tend to peak in December-January and reach a low in June-July,” Anderson explains in the latest In the Cattle Markets from the Livestock Marketing Information Center. “The seasonal decline in stocks has been, on average, about 82 million pounds over the last five years. In 2022, there was very little seasonal decline and supplies grew to 544 million pounds by the end of the year.”
Beef in cold storage at the end of last month was 533 million pounds, according to Anderson
“Putting this level of stocks in context is that 533 million pounds is about 1.6 pounds per person, which is not a lot different than per capita stocks over the last several decades,” Anderson explains. “Per capita cold storage stocks were over 2 pounds back in the early to mid-1970s when the U.S hit peak cattle numbers and beef demand began to decline.”
Keep in mind domestic beef production was record large last year,
Total red meat supplies in freezers Jan. 31 were up 5% from the previous month and up 9% from last year, according to USDA’s Cold Storage report. Frozen pork supplies were 13% higher month to month and 19% more year over year. Total frozen poultry supplies on the same date were 3% more than the previous month and 13% more than the same time last year.