Negotiated cash fed cattle trade was at a standstill in all major cattle feeding regions through Monday afternoon, according to the Agricultural Marketing Service (AMS).
Last week, live prices were at $117/cwt. in the Southern Plains, $118 in Nebraska and $118-$120 in the western Corn Belt. Dressed prices were at $190 in Nebraska and at $188-$190 in the western Corn Belt.
The five-area direct average steer price was $118.08/cwt. last week on a live basis. That was $2.49 more than the prior week. The average five-area direct steer price in the beef was $189.36, which was $4.89 more.
Cattle futures closed sharply higher Monday, supported by stronger cash prices, increasing wholesale beef values and higher outside markets.
Live Cattle futures closed an average of $1.32 higher.
Feeder Cattle futures closed an average of $2.07 higher, from $1.35 to $2.57 higher.
Choice boxed beef cutout value was $5.82 higher Monday afternoon at $258.67/cwt. Select was $2.89 higher at $249.86.
Corn futures closed mostly 4¢ to 9¢ higher, except for 6¢ lower in the front two contracts.
Soybean futures closed mostly 5¢ to 9¢ higher.
Major U.S. financial indices closed sharply higher Monday, buoyed by Friday’s positive national employment outlook.
Total nonfarm payroll employment rose by 916,000, month to month, in March, according to the U.S. Bureau of Labor Statistics. That was significantly more than the trade expected. The unemployment rate edged down to 6.0%.
In March, average hourly earnings for all employees on private nonfarm payrolls fell by 4¢ to $29.96.
The Dow Jones Industrial Average closed 373 points higher. The S&P 500 closed 58 points higher. The NASDAQ was up 225 points.
Significantly higher feed costs than last year will encourage feedlots to place cattle at heavier weights, says Derrell Peel, Extension livestock marketing specialist at Oklahoma State University. In turn, stocker and backgrounders have more incentive to add more weight to cattle.
In his weekly market comments, Peel points out current weekly average cash corn prices are reported at $5.85/bu. in Dodge City, at $5.99/bu. in Garden City and at $6.01/bu. in the Texas Triangle. He explains those prices are 79-82% more than the lows in August.
“Feedlots will also look for opportunities to adjust feedlot rations using cheaper substitute ingredients, if possible,” Peel says. “Wheat may offer some potential in feedlot rations in the coming weeks and months. Winter wheat prices in the Southern Plains have increased in the last eight months but relatively less than corn.”
Peel uses Dodge City prices as an example. The current cash wheat price (hard red winter) is 41% more than in August at $5.37/bu., but it’s cheaper than corn at $5.85/bu.
“In general, a wheat price of 107% of corn price is equivalent on a price per pound basis (60 lbs. of wheat/bu. versus 56 lbs./bu. for corn),” Peel says. “In some circumstances, wheat may have additional feed value compared to corn due to a higher protein content. However, cattle rations typically do not need the additional protein, so wheat value is based primarily on energy content. Feedlots do not change rations quickly or for short periods of time but will adjust if market conditions suggest that an extended period of alternative feeds is likely.”