Cattle futures continued mostly higher Tuesday with continued power from fundamental strength.
Toward the close, Live cattle futures were an average of 73¢ higher (5¢ to $1.55 higher), except for 42¢ lower in spot Aug. Feeder Cattle futures were an average of $2.49 higher.
Negotiated cash fed cattle trade was inactive on light to moderate demand in all major cattle feeding regions through Tuesday afternoon, according to the Agricultural Marketing Service.
Last week, FOB live prices were $235/cwt. in Kansas, $243-$245 in Nebraska and $240-$245 in the western Corn Belt. Dressed delivered prices were $380-$385. The previous week, FOB live prices in the Texas Panhandle were $235.
Choice boxed beef cutout value was $2.96 higher Tuesday afternoon at $407.20. Select was $2.62 higher at $379.76.
Grain and Soybean futures were lower Tuesday, pressured by yields estimated in early crop tours and favorable crop progress.
Toward the close and through Jly contracts, Corn futures were 3¢ lower. Kansas City Wheat futures were 3¢ to 7¢ lower. Soybean futures were 6¢ to 8¢ lower.
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Major U.S. financial indices closed mostly lower Tuesday with pressure from tech stocks.
The Dow Jones Industrial Average closed 10 points higher. The S&P 500 closed 37 points lower. The NASDAQ was down 314 points.
Through mid-afternoon, West Texas Intermediate Crude Oil futures (CME) were 55¢ to $1.02 lower through the front six contracts.
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The sheer height of historically high cattle prices makes many on both sides of the trade understandably nervous, wondering when and how fast it might unravel. But, Derrell Peel, Extension livestock marketing specialist at Oklahoma State University emphasizes the need to keep in mind the fundamental reasons for such high prices.
“Calf crops have declined the past seven years and are down 8.8% from the cyclical peak in 2018. The 2025 U.S. calf crop is the lowest since 1941,” Peel explains, in his weekly market comments. “The beef cow herd is at a cyclical (maybe) and multi-decade low and is showing little sign of rebuilding. The closure of the Mexican border adds to the ever-tighter feeder cattle supply. The slow decrease in feedlot inventories in the past two years has, to some extent, masked the fact that feeder supplies were continuing to dwindle.”
Moreover, Peel notes auction receipts suggest more available calves are moving to market earlier than normal as producers seek to take advantage of current prices. In Oklahoma, for instance, he says auction receipts were 29.2% higher year over year during the last four weeks.
“Changing the timing of the fall run of calves may briefly mask the actual feeder supply situation in the country for a few weeks,” Peel says. He explains feedlot placements will likely be larger through the third quarter than otherwise would have been the case. However, he says feeder cattle volume in the fourth quarter will likely drop noticeably.
“Stocker and feedlot buyers should not expect seasonally lower feeder prices this fall,” Peel says. “With still no indication of significant heifer retention, the implication is that tight feeder supplies must get tighter yet in order to begin the process that will lead to eventual herd rebuilding. Herd rebuilding is slow to start and appears to be slow-paced at this time. This suggests that cattle prices will move higher and remain elevated for an extended period of time with a peak that is still in the future.”