Cattle futures extended gains Wednesday, buoyed by strong cash feeder cattle prices and the growing prospects of higher money for cash fed cattle this week.
Feeder Cattle futures closed an average of $1.60 higher. Live Cattle futures edged an average of 36¢ higher.
Negotiated cash fed cattle trade was limited on light demand through Wednesday afternoon, according to the Agricultural Marketing Service. Although too few to trend, there were some live trades in the Southern Plains at $141/cwt. and a few in the western Corn Belt at $147.
Last week, live prices were $140/cwt. in the Southern Plains, $144-$148 in Nebraska and $146-$148 in the western Corn Belt. Dressed prices were $229-$230.
On Wednesday, slaughter steers and heifers sold steady to $2 higher at Sioux Falls Regional in South Dakota. At Tama Livestock in Iowa, Choice slaughter steers and heifers sold $3.50-$4.50 higher amid a light offering.
Choice Boxed beef cutout value was $1.10 lower Wednesday afternoon at $264.34/cwt. Select was $1.23 lower at $237.89/cwt.
Grain and Soybean futures firmed Wednesday.
Corn futures closed fractionally higher to 4¢ higher through Jly ‘23 and then 2¢ to 3¢ lower.
Soybean futures closed mostly 6¢ to 9¢ higher through Aug. ’23 and then mostly 1¢ higher.
Major U.S. financial indices closed lower Wednesday, as investors took a breather from the recent rally. News for the day included mixed quarterly earnings reports for retailers.
The Dow Jones Industrial Average closed 171 points lower. The S&P 500 closed 31 points lower. The NASDAQ was down 164 points.
West Texas Intermediate Crude Oil futures on the CME closed $1.24 to $1.58 higher through the through the front six contracts.
Plenty of eyes will focus on July feedlot placements in the monthly Cattle on Feed report due out Friday.
“So far, 2022 feedlot placements are averaging 0.4% above 2021. However, when you remove February (Feb. 2021 winter storm), 2022 feedlot placements are averaging 1.5% below 2021,” says James Mitchell, livestock economist at the University of Arkansas, in the latest Cattle Market Notes Weekly. “In June, placements were 2.5% lower year over year. July 1 cattle on feed totaled 11.3 million head or 0.4% above July 1, 2021. Drought-induced placements in July could hold Aug. 1 cattle on feed numbers close to or slightly above August 2021 feedlot inventories.”
Seasonally speaking, Mitchell explains larger placements of feeder cattle weighing more than 700 lbs. usually come in August and September. He notes national feeder and stocker cattle auction receipts in July of 529,000 head were 1.2% less year over year.
“While total auction receipts are lower for July, the breakout by weight group suggests that we are seeing cattle come off summer pasture earlier than normal,” Mitchell says. “Last month 63% of feeder cattle auction receipts were for cattle weighing over 600 lbs. Cattle weighing over 600 lbs. accounted for 58% of auction receipts in July 2021. Auction receipt totals and these percentages imply that we sold 25,421 more head of heavy feeder cattle last month than in July 2021…The longer we delay the decline in feedlot inventories, the more significant it will become.”