Cattle futures rose Monday, buoyed by strong cash prices across the board.
Last week, the weekly weighted average five-area direct fed steer price was $7.34 higher on a live basis at $180.44/cwt. The average fed steer price in the beef was $11.12 higher at $289.77.
Regionally, negotiated cash fed cattle prices last week were $5 higher in the Southern Plains at $175/cwt. on a live basis, $7-$8 higher in Nebraska at $182-$184 and $6-$7 higher in the western Corn Belt at $180-$184. Dressed prices were $5-$10 higher at $290.
On Monday, cash fed cattle trade ranged from mostly inactive on very light demand to a standstill through Monday afternoon, according to the Agricultural Marketing Service.
Those prices were helped along by the recent seasonal bump higher in wholesale beef values.
Choice boxed beef cutout value was $3.36 higher Monday afternoon at $305.98/cwt. Select was $5.45 higher at $289.32/cwt. Week to week on Monday, Choice was up $13.07 and Select was up $10.92.
Cash calf and feeder cattle prices followed a similar trajectory last week, with steers and heifers selling $5-$9/cwt. higher nationwide, except for $9-$15 higher in the North Central region, according to AMS.
Feeder Cattle futures closed an average of $1.31 higher on Monday (55¢ higher at the back to $2.85 higher toward the front).
Live Cattle futures closed an average of 93¢ higher.
That was with Grain and soybean futures closing higher Monday, with Support including cool-to-cold, wet weather on the cusp of planting season, as well as Poland’s decision to prohibit grain exports from Ukraine, which slows global grain flow.
Corn futures closed mostly 4¢ to 6¢ higher.
KC HRW Wheat closed mostly 9¢ to 13¢ higher.
Soybean futures closed mostly 10¢ to 18¢ higher in the front six contracts, and then 7¢ to 9¢ higher.
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Major U.S. financial indices closed higher Monday, with investors apparently betting on recent readings of cooling inflation and spending leading to less restrictive monetary policy, at least for the day.
The Dow Jones Industrial Average closed 100 points higher. The S&P 500 closed 13 points higher. The NASDAQ was up 34 points.
West Texas Intermediate Crude Oil futures (CME) closed $1.30 to $1.69 lower through the front six contracts.
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Domestic consumer beef demand resilience continues.
“It does not appear that consumer beef buying behavior has changed significantly thus far with higher retail beef prices,” says Derrell Peel, Extension livestock marketing specialist at Oklahoma State University, in his weekly market comments. “There is little indication of consumers trading down…i.e. switching to lower value products and away from more expensive beef cuts.”
For price perspective, Peel explains all fresh retail beef prices were $7.23 per pound in February, down 1.8% year over year.
“Retail beef prices have been mostly steady since late 2021. The 12-month moving average of monthly retail beef prices has been above $7.25/lb. since April 2022,” Peel says. “This indicates strong beef demand given record beef production in 2022 and the highest beef consumption per capita at 58.9 pounds (unchanged from 2021) since 2010. Retail all-fresh beef prices averaged $7.30/lb. in 2022, the highest on record and up 5.1% over 2021 average retail prices. The highest monthly price ever was in October 2021 at $7.55/lb.”
Peel notes middle meats continue to lead wholesale beef prices higher with tenderloins and ribeyes 12-15% higher year over year. He explains Chuck and Round wholesale values vary across a wide range of products, while Brisket values are weaker compared to last year.
“Both 90% and 50% lean beef trimmings have advanced significantly thus far in 2023, pushing ground beef prices higher. Higher ground beef prices are probably partly due to stronger demand but are mostly due to decreasing supplies of processing beef,” Peel says.
Higher beef prices stem from strong consumer demand, as well as declining beef production. As noted in Cattle Current, estimated year-to-date cattle slaughter of 9.4 million head last week was 284,000 head fewer (-2.9%) than the same period a year earlier. Estimated year-to-date beef production of 7.7 billion pounds was 373.2 million pounds less (-4.6%).
“Carcass weights for all classes of cattle are lower year over year with average cattle carcass weights down 15.2 pounds year over year,” Peel says. “Steer carcass weights have averaged 14.7 pounds lighter this year with heifers averaging 19.2 pounds lighter and cow carcass weights smaller by 11.6 pounds compared to one year ago.”