Cattle futures were lower Wednesday, pressured by a sharp decrease in Choice wholesale beef values.
Choice boxed beef cutout value was $8.22 lower in the afternoon at $391.69/cwt. Select was 99¢ higher at $395.49. The Choice-Select spread was -$3.80. The last time the spread approached that level was in February 2022.
Toward the close, also awaiting the week’s negotiated cash fed cattle direction, Live Cattle futures were an average of 51¢ lower, except for 10¢ higher in away Aug.
Feeder Cattle futures were an average of $1.15 lower, except for $1.55 higher in waning spot Mar.
Negotiated cash fed cattle trade was inactive on light demand in all major cattle feeding regions through Wednesday afternoon, according to the Agricultural Marketing Service.
Last week, FOB live prices were mostly $235/cwt. Dressed delivered prices were mostly $372.
Grain futures were higher Wednesday, supported by announced rescheduled U.S. trade talks with China.
Toward the close, and through near Sep contracts, Kansas City HRW Wheat futures mostly 13¢ to 15¢ higher. Corn futures were 5¢ higher. Soybean futures were mostly 10¢ to 18¢ higher.
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Major U.S. financial indices rose Wednesday as crude oil prices declined on reports the U.S. sent a ceasefire proposal to Iran.
The Dow Jones Industrial Average closed 305 points higher. The S&P 500 closed 35 points higher. The NASDAQ was up 167 points.
West Texas Intermediate Crude Oil futures (CME) were 71¢ to $1.29 lower through the front six contracts.
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As mentioned in Cattle Current recently and perhaps indicated by more feedlot placements than expected in February, drought and the threat of it continue as headwinds to herd expansion.
Drought was impacting 54.8% of the continental U.S., according to the latest U.S. Drought Monitor. That was about 1% more than the previous week and 14% more than three months earlier.
Similarly, 54% of the U.S. cattle herd was in areas affected by drought, the same as a week earlier but 19% more than three months earlier.
Unfortunately, the current NOAA outlook for April-June suggests above-normal temperatures across much of the nation in tandem with normal to below-normal precipitation.