Negotiated cash fed cattle trade was mostly inactive on very light demand in the western Corn Belt through Monday afternoon. Elsewhere, it was at a standstill, according to the Agricultural Marketing Service.
Last week, live prices were at $120/cwt. in the Texas Panhandle, $120-$121 in Kansas, $122-$126 in Nebraska, $122-$123 in Colorado and at $122-$124 in the western Corn Belt. Dressed prices were at $196 in Nebraska and at $194-$196 in the western Corn Belt.
Cattle futures finally found some traction Tuesday, even in the face of surging Corn futures. Besides being oversold, the need for fed cattle prices to rise with long-term higher feed costs could have something to do with the transition.
Live Cattle futures closed an average of $1.04 higher (22¢ to $1.60 higher).
Feeder Cattle futures closed an average of $1.30 higher (30¢ to $1.75 higher), except for 15¢ lower in spot Apr.
Choice boxed beef cutout value was $2.09 higher Tuesday afternoon at $278.26/cwt. Select was $1.34 higher at $270.47.
Grain futures surged higher again Tuesday, helped along by a building weather premium based on dryness in Brazil and in the U.S. Northern Plains.
Although this week’s cold snap likely will stall planting in some parts of the U.S., corn planting was on par with the five-year average of 8%, as of Apr. 18, according to the most recent USDA Crop Progress report. Soybean planting was 1% ahead of average at 3%.
Corn futures closed 8¢ to 14¢ higher through Jly ‘22, and then mostly 5¢ higher.
Soybean futures closed 19¢ to 22¢ higher through the front three contracts, 15¢ higher through the next five and then mostly 10¢ to 13¢ higher.
Major U.S. financial indices extended losses Tuesday. Reports from the World Health Organization (WHO) that COVID-19 cases increased the last eight weeks seemed the primary pressure.
“The COVID-19 pandemic shows no signs of easing, with global case and death incidence at a concerning rate since mid-February 2021,” according to the latest WHO update. “A third of the global cumulative COVID-19 cases and deaths have been reported in the last three months alone…”
The Dow Jones Industrial Average closed 256 points lower. The S&P 500 closed 28 points lower. The NASDAQ was down 128 points.
“Despite the recent declines in futures prices, there remains cautious optimism in cattle markets this year,” says Josh Maples, Extension livestock economist at Mississippi State University. “The expectation of tightening supplies and a strong beef demand profile provide some optimism for stronger markets this year. However, there are still many factors to watch closely.”
For instance, in the latest issue of In the Cattle Markets, Maples says drought and pasture conditions are of primary concern as worsening conditions are forcing herd liquidation decisions for many producers in the Northern Plains.
Related, Maples points to elevated feed prices with little prospect of reprieve if planted acres come in near those suggested by USDA’s Prospective Plantings report. He notes Corn futures are above $5 until the Sep ’22 contract.
Shorter term, Maples says the next monthly Cattle on Feed report—due out Friday—will show significantly more March feedlot placements year over year, since the comparison is to extraordinarily sparse placements in 2020 when pandemic effects were taking hold.
“While placements are nearly certain to be higher than a year ago, just how much higher is the big question,” Maples says. “Very large placement totals in March 2021 could lead to larger than expected totals of market-ready live cattle this summer. The recent declines in summer-month Live Cattle futures may be reacting to this possibility.”