Cattle futures gave back most of what they gained in the previous session, amid sluggish trade and a lack of weekly cash direction.
Feeder Cattle futures closed an average of $1.16 lower (88¢ to $1.43).
Live Cattle futures closed an average of 93¢ lower, (53¢ to $1.25 lower).
Corn futures closed 1¢ to 5¢ lower, with follow-through pressure from last week’s positive crop progress and ratings.
KC HRW Wheat closed unchanged to 1¢ lower.
Soybean futures closed 12¢ to 18¢ lower.
Negotiated cash fed cattle trade was at a standstill in all trading regions through Tuesday afternoon, according to the Agricultural Marketing Service.
Last week, FOB live prices were $178-$179/cwt. in the Texas Panhandle, $179 in Kansas. $185-$188 in Nebraska and $186-$188 in the western Corn Belt. Dressed delivered prices were $294-$295 in Nebraska and $290-$295 in the western Corn Belt.
However, wholesale beef prices were up. Choice boxed beef cutout value was $1.49 higher Tuesday afternoon at $317.05/cwt. Select was $2.18 higher at $289.51/cwt.
Major U.S. financial indices closed mixed Tuesday, pressured by the recent peak in Treasury-note yields, as well as bank stocks.
The Dow Jones Industrial Average closed 174 points lower. The S&P 500 closed 12 points lower. The NASDAQ was up 8 points.
West Texas Intermediate Crude Oil futures (CME) closed 29¢ to 48¢ lower through the front six contracts.
Despite slacker Feeder Cattle futures prices recently, Andrew P. Griffith, agricultural economist at the University of Tennessee points out they continue to trade in the same $10 range since the end of June.
“The question now is if the market will trade lower than the established range or does it have the ability to make a run to even higher prices?” Griffith says, in his weekly market comments. “There is no way of knowing the answer, but the market sure seems to be finding little to no support for higher prices at this time. This would mean it is more likely for feeder cattle to stay in its current trading range or to soften.”
According to Griffith, as strong as market fundamentals are, it’s possible prices have outpaced the support.
“A good example of this was in 2014 and 2015 when prices ascended rapidly and then descended rapidly through 2016 and 2017,” Griffith says. “This commentary is not saying cattle prices should be higher, lower, or exactly where they are, but it is saying the market is expected to be efficient. This simply means the market will adjust such that price is in line with supply and demand.”