Negotiated cash fed cattle trade ranged from a standstill to mostly inactive on very light demand through Monday afternoon, according to the Agricultural Marketing Service.
Last week, live prices were $141-$142/cwt. in the Southern Plains, $146.00-$148.50 in Nebraska and $148-$150 in the western Corn Belt. Dressed prices were $234.
The five-area direct weighted average fed steer price last week was $146.88/cwt. on a live basis, which was $2.49 more than the previous week. The weighted average price in the beef was $4.30 higher at $234.23.
Choice Boxed beef cutout value was 24¢ higher Monday afternoon at $264.52/cwt. Select was 42¢ higher at $238.36/cwt.
Apparently, bullish supply fundamentals were enough to help Cattle futures mainly fade the bearish Cattle on Feed report, especially given higher Corn futures prices.
Live Cattle futures closed mixed, from an average of 42¢ lower to an average of 22¢ higher.
Feeder Cattle futures closed an average of 16¢ lower, except for unchanged to an average of 20¢ higher in the back two contracts.
Grain and Soybean futures gained more traction with concerns about drought in China.
Corn futures closed mostly 5¢ to 7¢ higher.
Soybean futures closed mostly 28¢ to 31¢ higher.
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Major U.S. financial indices closed sharply lower Monday amid growing concerns about global economic growth and how more interest rate hikes will impact domestic growth.
The Dow Jones Industrial Average closed 643 points lower. The S&P 500 closed 90 points lower. The NASDAQ was down 323 points.
West Texas Intermediate Crude Oil futures on the CME closed 8¢ to 54¢ lower through the front six contracts.
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Higher-trending feeder cattle prices could significantly reduce or offset the typical seasonal decline in calf prices this fall, says Derrell Peel, Extension livestock marketing specialist at Oklahoma State University, in his weekly market comments.
Peel notes 750 lb. steers at Oklahoma auctions reached their highest levels for the year in mid-August, while 500 lb. steer calves revisited the highs of mid-March. Supplies will continue to tighten, given cow liquidation longer term and increased lightweight feedlot placements in the near term.
“Increased lightweight placements, especially since May, likely includes fall calves marketed right off the cow, early-weaned spring calves and summer stockers marketed ahead of schedule,” Peel says. “Pasture and range conditions are currently rated at 52% poor/very poor, the worst level for this time of year since 2012. It appears that the supply of calves and feeder cattle available this fall will likely be significantly smaller because many cattle have already moved to market.”
For perspective, Peel explains feedlot placements the past six months of 10.91 million head were 0.8% more than the same time in 2021.
“In those six months, placements weighing under 700 lbs. were up 3.5% year over year, while placements over 700 lbs. were down 0.7%. All of this suggests that feedlots are somewhat back-loaded with relatively tighter numbers finishing in the August – October period and recent lightweight placements finishing in November and later,” Peel says.
As noted in the last issue of Cattle Current, placements in July of 1.77 million head were 32,000 head more (+1.8%) than a year earlier and about 3% more than expectations, according to the monthly Cattle on Feed report.
Cattle on feed Aug. 1 of 11.22 million head were 150,000 head more year over year (+1.4%), which was 0.6% more than expectations ahead of the report. Inventory was the second largest for the date since the data series began in 1996.