Cattle futures closed lower Monday on lackluster trade and static to declining open interest.
Feeder Cattle futures closed an average of $1.08 lower.
Live Cattle futures an average of 61¢ lower.
Negotiated cash fed cattle trade was at a standstill in all regions through Monday afternoon, according to the Agricultural Marketing Service.
Live FOB prices last week were steady at $180/cwt. in the Southern Plains and $188 in the north where dressed delivered prices were steady at $295.
Choice boxed beef cutout value was $2.89 higher Monday afternoon at $305.50/cwt. Select was $3.22 higher at $280.45/cwt.
Corn futures closed mostly fractionally higher to 1¢ higher.
Soybean futures closed mostly 10¢ to 18¢ higher.
KC HRW Wheat closed mostly 9¢ to 15¢ lower.
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Major U.S. financial indices edged higher Monday, supported by tech stocks.
The Dow Jones Industrial Average closed 26 points higher. The S&P 500 closed 25 points higher. The NASDAQ was up 143 points.
West Texas Intermediate Crude Oil futures (CME) closed 62¢ to 68¢ lower through the front six contracts.
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Amid tighter feeder cattle supplies and lower feedlot cost of gain, stocker opportunities veer toward lightweight cattle with more incentive to market with less weight gain ahead of the feedlot, according to Derrell Peel, Extension livestock marketing specialist at Oklahoma State University, in his weekly market comments.
“As cattle numbers continue to tighten this year, the general incentive in the market is to push cattle into feedlots sooner and through the beef production system faster to keep beef production as high as possible,” Peel explains. “Beef production is down about 4.8% year over year thus far in 2023 but is falling more sharply recently with July beef production down 6.7% compared to one year ago.”
Moreover, Peel says cheaper cost of gain, as corn prices moderate, provide feedlots more opportunity to compete for limited feeder cattle supplies and further enhance the general need to push cattle through the system faster. “A lower feedlot cost of gain generally means feedlots can purchase lighter weight feeder cattle and place them in feedlot earlier,” he says.
As for fall grazing, at least on Oklahoma, Peel says wheat pasture prospects are more promising than in recent years with improved soil moisture and soil temperature conditions for early-planted winter wheat.
“Dynamic cattle and grain market conditions mean that producers will need to carefully and frequently evaluate stocker budget prospects this fall prior to stocker purchase,” Peel says. “Calf prices are moving counter-seasonally higher this summer suggesting that stocker purchase costs will continue to increase this fall. The Oklahoma combined auction price for 450-500 pounds Medium/Large #1 steers in the second week of August reached $302.05/cwt., the highest weekly price since June 2015 and just 6.4% below the record high of $322.56/cwt. in November 2014.”