Cattle futures eased higher Tuesday, with follow-through support.
Feeder Cattle futures closed an average of 65¢ higher.
Live Cattle futures closed an average of 25¢ higher (10¢ higher at the back to 72¢ higher at the front).
Corn futures closed mostly 1¢ to 4¢ higher.
KC HRW Wheat closed 6¢ to 8¢ lower through May ‘24 and then mostly 1¢ lower.
Soybean futures closed mostly 5¢ to 8¢ higher.
Negotiated cash fed cattle trade ranged from mostly inactive on very light demand to a standstill through Tuesday afternoon, according to the Agricultural Marketing Service.
Live prices last week were $175/cwt. in the Southern Plains, $182-$184 in Nebraska and $180-$184 in the western Corn Belt. Dressed prices were $290.
Choice boxed beef cutout value was $1.08 higher Tuesday afternoon at $307.06/cwt. Select was $2.29 higher at $291.61/cwt.
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Major U.S. financial indices closed little changed on Tuesday amid mixed quarterly earnings reports.
The Dow Jones Industrial Average closed 10 points lower. The S&P 500 closed 3 points higher. The NASDAQ was down 4 points.
West Texas Intermediate Crude Oil futures (CME) closed 3¢ to 7¢ higher through the front six contracts.
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USDA’s Economic Research Service (ERS) increased the projected second-quarter feeder steer price (750-800 pounds, Oklahoma City) by $6/cwt. to $199, based on recent price data. In the latest monthly Livestock, Dairy and Poultry Outlook, ERS forecast prices at $214 in the third quarter and $224 in the fourth quarter for an annual average of $205.12, which would be about $37 higher year over year.
As reported recently in Cattle Current, ERS projected the weighted average five-area direct fed steer price $6 higher in the second quarter and $3 higher in the third and fourth quarters: $169/cwt. in the second, $214 in the third and $224 in the fourth quarter. The average annual price was projected to be $164.50, about 14% more year over year.
“Despite an increase in expected fed cattle marketings in 2023 from last month, supplies will remain tighter than last year,” ERS analysts say. “The recent surge in prices may be attributed to stronger demand in the North, where packing capacity is the greatest but market-ready supplies may be relatively tighter.”
The same goes for the current price differential between North and South. For example, ERS analysts explain, based on price data for the week ending April 9, the total all-grades price for Nebraska steers averaged $175.37/cwt., which was $5.42 more than reported prices in Texas.
“The difference in prices likely reflects, in part, the relative availability of fed cattle in the South. Nebraska has a relatively smaller supply of market-ready cattle, despite poor winter weather conditions possibly pushing Nebraska feedlots to keep cattle on feed longer to achieve the desired carcass grades,” ERS analysts explain. “According to the Midwest Regional Climate Center’s Accumulated Winter Season Severity Index, many locations in the Northern Plains experienced extreme winter weather this year, and this likely decreased feedlot performance, lowering cattle out-weights. As a result, packers likely had to increase prices paid for fed cattle in Nebraska relative to southern markets.”