Cattle futures gained ground Thursday, helped along by eroding Corn futures, likely positioning ahead of Friday’s monthly Cattle on Feed report and despite the steady to softer tone of weekly fed cattle prices.
Feeder Cattle futures closed an average of $1.74 higher (35¢ to $2.75 higher).
Live Cattle futures closed an average of 62¢ higher, except for $1.32 lower in spot Apr and 10¢ lower in the back contract.
Traders appeared to pull some weather premium from grain and soybean contracts Thursday, with a more favorable forecast.
Weekly export sales also pressured Corn or Soybeans.
Net 2022-2023 U.S. corn export sales (April 13) were 41% less than the previous week and 79% less than the prior four-week average. Net 2022-2023 U.S. soybean export sales were down 73% from the previous week and 58% from the prior four-week average.
On the other hand, Net U.S. 2023 beef export sales of 19,100 metric tons were up noticeably from the previous week and up 47% from the prior four-week average, according to the latest U.S. Export Sales report. Increases were primarily for South Korea, Japan, Mexico, Taiwan and China.
Negotiated cash fed cattle trade ranged from slow on light to moderate demand to a standstill through Thursday afternoon, with too few transactions to trend, according to the Agricultural Marketing Service.
So far this week, live prices are steady in the Southern Plains at $175/cwt., steady to $2 lower in Nebraska at $182 and unevenly steady in the western Corn Belt at $181-$183. Dressed prices are $2 lower at $288.
Choice boxed beef cutout value was $1.07 higher Thursday afternoon at $306.99/cwt. Select was $2.72 lower at $288.74/cwt.
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Major U.S. financial indices closed lower Thursday, led by tech stocks.
The Dow Jones Industrial Average closed 110 points lower. The S&P 500 closed 24 points lower. The NASDAQ was down 97 points.
West Texas Intermediate Crude Oil futures (CME) closed $1.73 to $1.87 lower through the front six contracts.
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Nationwide, drought conditions continued to improve last week. According to the latest U.S. Drought Monitor (April 18), drought existed across 25.8% of the continental United States, compared to 43.9% three months earlier and 55.4% a year earlier.
“The coverage of severe (D2) to exceptional (D4) drought is near to its lowest since July 2020,” according to Drought Monitor analysts.
However, moderate to severe drought continues to persist in the Southern Plains and Central Plains. The worst conditions will likely continue from the tip of Texas and up through Kansas, including eastern New Mexico and eastern Colorado, as well as pockets in the West. That’s according to the U.S. Seasonal Drought Outlook for April 20 through July 31 this year.
Prospects for El Niño developing provide some hope for those in the Central and Southern Plains. The National Weather Service Climate Prediction Center recently issued an El Niño Watch, with a 62% chance of El Niño developing in North America during May-July of this year.
An estimated 41% of the nation’s cattle inventory is in areas currently affected by drought.