Cattle futures were mostly higher on Tuesday, despite resurgent oil prices and volatile equity markets. Toward the close, Live Cattle futures were an average of 47¢ higher, except for an average of 15¢ lower in the front two contracts. Feeder Cattle futures were an average of $1.91 higher.
Negotiated cash fed cattle trade was inactive on light demand in all major cattle feeding regions through Tuesday afternoon, according to the Agricultural Marketing Service.
Last week, FOB live prices were mostly $235/cwt. Dressed delivered prices were mostly $372.
Choice boxed beef cutout value was 78¢ higher Tuesday afternoon at $399.91/cwt. Select was 67¢ higher at $394.50.
Grain futures were higher Tuesday, buoyed by higher crude oil prices.
Toward the close, and through near Sep contracts, Kansas City HRW Wheat futures mostly 2¢ to 3¢ higher. Corn futures were 1¢ to 2¢ higher. Soybean futures were mostly 3¢ to 9¢ lower.
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Major U.S. financial indices closed lower Tuesday as crude oil prices turned up again.
The Dow Jones Industrial Average closed 84 points lower. The S&P 500 closed 24 points lower. The NASDAQ was down 184 points.
West Texas Intermediate Crude Oil futures (CME) were 76¢ to $1.06 higher through the front six contracts.
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Wholesale beef prices continue higher ahead of seasonal peak demand, helped along by slower packer production.
“Memorial Day is considered the unofficial start of grilling season, which typically brings peak seasonal demand for beef. March and April usually bring peak demand for other proteins such as ham and lamb, while beef demand slows,” explains Bernt Nelson, economist with the American Farm Bureau Federation, in the latest issue of In the Cattle Markets. “This year, demand for beef has risen over the last several weeks, pulling prices higher at a much faster pace than in past years.”
Nelson points out the Choice beef cutout value increased $50.14/cwt. (13%) between Jan. 2 and March 20, leading many analysts wondering if the strong grilling-season demand will pull beef prices even higher this summer.
“Cattle supplies will take years to rebuild, but demand can change more quickly. Events such as a recession could be a threat to the strong demand that has supported beef prices over the last couple of years,” Nelson says. “Continued strong demand is key to maintaining a strong cattle market in the months to come. If demand begins to fall for any reason, especially during grilling season, beef prices will also begin to fall along with the cutout value. When the cutout falls, the packer has to buy cattle at a lower price, which leads to lower prices at the farm gate.”