Negotiated cash fed cattle trade ranged from limited on light demand in the western Corn Belt to inactive on very light demand through Wednesday afternoon, according to the Agricultural Marketing Service. Although too few transactions to trend, there were some early sales in the western Corn Belt at $180/cwt. on a live basis and $285 in the beef.
Last week, live prices were $175/cwt. in the Texas Panhandle, $173-$175 in Kansas $180-$185 in Nebraska and $180-$183 in the western Corn Belt. Dressed prices were $284-$290 in Nebraska and $288 in the western Corn Belt.
Choice boxed beef cutout value was $1.61 higher Wednesday afternoon at $309.24/cwt. Select was 32¢ higher at $287.94/cwt.
Weaker Corn futures, and apparently renewed focus on fundamentals, helped Cattle futures gain on Wednesday.
Feeder Cattle futures closed an average of $1.53 higher, (60¢ to $2.15 higher).
Live Cattle futures closed an average of 60¢ higher, (22¢ higher at the front to $1.05 higher at the back).
Corn futures closed 4¢ to 6¢ lower.
KC HRW Wheat closed mostly 12¢ to 24¢ lower.
Soybean futures closed mixed — fractionally mixed through Sep ’24 and then 3¢ to 4¢ higher. The exception was 9¢ and 2¢ lower in the front two contracts.
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Major U.S. financial indices closed lower again Wednesday with follow-through pressure from renewed concerns about bank health tied to First Republic Bank.
The Dow Jones Industrial Average closed 228 points lower. The S&P 500 closed 15 points lower. The NASDAQ was down 113 points.
West Texas Intermediate Crude Oil futures (CME) closed $2.30 to $2.77 lower through the front six contracts.
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Although recent weekly cash fed cattle prices eclipsed the previous highs, Elliott Dennis, Extension livestock economist at the University of Nebraska-Lincoln points out real prices for feeder and fed cattle — adjusted for inflation —remain less than the peaks in 2013-2015.
“The significant rise in cattle prices along the supply chain has been encouraging. But, as in every year, higher prices are nice but wide profit margins are better,” Dennis says, in the latest issue of In the Cattle Markets.
“Previous studies have found that interest rates reduce feeder cattle prices. On average, a 1% increase in the interest rates would decrease feeder cattle prices by 1.14% (Marsh 2001),” Dennis explains. “Ultimately, higher interest rates squeeze profit margins and producers will seek to reduce these impacts.”
Reducing the number of days cattle are on feed by placing cattle at heavier weights is one way producers can ease the impact of higher interest rates, according to Dennis. Increasing operational efficiency is another.
“The interest in and use of precision livestock management has increased in the last five years, ranging from animal health detection such as Cattle Sense in feedlots to virtual fencing in the cow-calf sector,” Dennis explains. “Many other technologies have been and will be available to producers. Some technologies will also help in solving long-run concerns about labor.”