Despite another day of lower Corn futures, Feeder Cattle futures paddle in place on Monday, closing an average of 33¢ lower, except for unchanged to an average of 12¢ higher in the front three contracts.
Softer cash fed cattle prices last week and continued erosion in open interest helped cap Live Cattle, which closed an average of 46¢ lower, from 7¢ to 70¢ lower.
Last week, FOB negotiated cash fed cattle were $1-$2 lower at $178-$179/cwt. in the Texas Panhandle on a light test. Likewise, prices were $1-$2 lower in Kansas at $178-$179 on a light test but with a few up to $185. Live-delivered prices in Kansas were $182.50 to $184. In Nebraska, FOB live trades were mostly $2 lower at mainly $186 on a light test, but a few up to $188.50. Live prices in the western Corn Belt were $1-$3 lower at 185-$187. Dressed delivered prices were steady to $3 lower in Nebraska at $292-$295 and steady to $1 lower in the western Corn belt at $294-$295.
Trade ranged from inactive on very light demand to a standstill through Monday afternoon, with too few transactions to trend, according to the Agricultural Marketing Service.
The weighted average five-area direct fed steer price last week was $1.38 lower on a live basis at $184.81/cwt. The weighted average steer price in the beef was $1.09 lower at $293.63.
Choice boxed beef cutout value was 22¢ lower Monday afternoon at $301.78/cwt. Select was 19¢ higher at $277.73/cwt.
Significantly cooler and wetter weather forecasted for the Corn Belt pushed grain and Soybean futures sharply lower Monday.
Corn futures closed 15¢ to 17¢ lower through Jly ‘24 and then mostly 8¢ to 10¢ lower.
KC HRW Wheat closed 23¢ to 43¢ lower.
Soybean futures closed mostly 31¢ to 50¢ lower.
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Major U.S. financial indices eked out gains Monday as investors closed out the month and geared up for another week of quarterly earnings reports.
The Dow Jones Industrial Average closed 100 points higher. The S&P 500 closed 6 points higher. The NASDAQ was up 29 points.
West Texas Intermediate Crude Oil futures (CME) closed 95¢ to $1.22 higher through the front six contracts.
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When national beef cow herd expansion finally begins, the dearth of heifers means rebuilding will likely be a slow process, according to Derrell Peel, Extension livestock marketing specialist at Oklahoma State University, in his weekly market comments.
“The previous record-high calf prices occurred after heifer retention was well underway and feeder cattle supplies were squeezed to their tightest levels. This process may begin in late 2023 but the tightest feeder supplies will not occur until 2024 at the earliest or possibly into 2025,” Peel says. “With the pipeline of beef replacement heifers and residual other heifers extremely low, heifer retention will likely begin mostly with heifer calves.”
Peel points out the inventory of calves weighing less than 500 pounds on July 1 was 26.3 million head, down 2.6% year over year, according to the semiannual USDA Cattle report.
“Rapidly rising calf prices in 2023 have not yet provoked any heifer retention and herd rebuilding,” Peel says. “The beef replacement heifer inventory was 4.05 million head, down 2.4% from last year and is the lowest ever in the July Cattle report. Not only are replacement heifer inventories low, but the supply of other heifers that could be used for breeding is also low … The other heifer inventory includes heifers already in feedlots as well as heifers that are part of the estimated feeder supply. The July Cattle report showed an inventory of other heifers at 7.3 million head, down 5.2% year over year.”