Negotiated cash fed cattle trade ranged from mostly inactive on very light demand to a standstill through Monday afternoon, with too few transactions to trend, according to the Agricultural Marketing Service.
For the week, live prices were $3-$5 higher in the Southern Plains at $170/cwt., $5-$6 higher in Nebraska at $174-$177 and $4-$7 higher in the western Corn Belt at $174-$177. Dressed prices were $5-$8 higher at $275-$280.
The five-area weighted average direct fed steer price (FOB) last week was record high at $173.10/cwt. on a live basis, which was $4.36 higher than the previous week. The average fed steer price in the beef was $8.29 higher at $278.65.
Choice boxed beef cutout value was $1.93 higher Monday afternoon at $292.91/cwt. Select was $2.62 higher at $278.40/cwt.
Cattle futures continued to rise Monday, on the back of the last two-week’s surge in cash prices.
Feeder Cattle futures closed an average of 61¢ higher (22¢ to $1.27 higher).
Live Cattle futures closed 44¢ higher.
Corn futures gained Monday with some likely positioning ahead of Tuesday’s monthly World Agricultural Supply and Demand Estimates.
Corn futures closed 5¢ to 10¢ higher through Jly ‘24, and then mostly 2¢ higher.
KC HRW Wheat closed 11¢ to 33¢ higher.
Soybean futures closed mostly fractionally mixed to 1¢ higher.
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Major U.S. financial indices closed mixed Monday as investors returned from the holiday weekend and grappled with the prospects of recession as Fed monetary policy battles inflation.
The Dow Jones Industrial Average closed 101 points higher. The S&P 500 closed 4 points higher. The NASDAQ was down 3 points.
West Texas Intermediate Crude Oil futures (CME) closed 72¢ to 96¢ lower through the front six contracts.
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Historically high fed cattle prices are unlikely to fade as much as seasonal trends indicate, says Derrell Peel, Extension livestock marketing specialist at Oklahoma State University.
“In a steady market, fed prices would typically peak seasonally about now and move lower through the third quarter before increasing to the end of the year,” Peel explains, in his weekly market comments. “This sort of typical pattern is currently priced into the Live Cattle futures with futures prices decreasing from the nearby April (currently just over $171/cwt.) to June (about $163/cwt.) and August ($162/cwt.) before increasing in the October contract ($166/cwt.) and December ($171/cwt.). At this time, Live Cattle futures prices do not exceed nearby levels until the February 2024 contract (currently $174/cwt.).”
However, Peel notes the strong uptrend in fed cattle prices in 2021 and 2022 offset seasonal trends.
“There is good reason to expect the uptrend to continue in 2023. The seasonality priced into the markets now may fade as markets trend higher going forward,” he says. “Feedlot inventories are just beginning to fall with ever tighter feeder cattle supplies and are likely to continue decreasing at least through 2023, pushing fed prices higher. Fed prices may increase more slowly or plateau briefly in the summer months but are not likely to have a typical seasonal decline going forward.”
For current perspective, the five-area weighted average direct fed steer price last week was record high at $173.10/cwt. on a live basis, which was $4.36 higher than the previous week. The average fed steer price in the beef was $8.29 higher at $278.65.
You can hear more of Peel’s market insights here.