Other than a few live sales in the western Corn Belt at $109/cwt.—too few to trend—negotiated cash fed cattle trade remained undeveloped through Tuesday afternoon, according to USDA’s Afternoon National Slaughter Cattle Review.
Cattle futures continued recent yo-yo movement, to the downside this time, with sluggish trade and traders apparently waiting for further direction.
Except for 7¢ lower in the back contract, Live Cattle futures closed an average of 83¢ lower.
Other than 10¢ lower in soon to expire Aug, Feeder Cattle futures closed an average of $1.21 lower, (92¢ to $2.25 lower).
Wholesale beef values were lower on light to moderate demand and offerings, according to the Agricultural Marketing Service.
Choice boxed beef cutout value was $1.30 lower Tuesday afternoon at $236.76/cwt. Select was 95¢ lower at $210.71.
Corn futures closed mostly 1¢ to 2¢ lower.
Soybean futures closed mostly 4¢ to 7¢ lower.
Major U.S. financial indices closed lower Tuesday, amid fretting over trade issues and possibilities of a coming recession, as indicated by the yield curve inversion.
The Dow Jones Industrial Average closed 120 points lower. The S&P 500 closed 9 points lower. The NASDAQ was down 26 points.
Although feedlot marketing remained aggressive last month, the estimated supply of cattle on feed more than 120 days was 0.7% more than the previous year, according to Brenda Boetel, a livestock economist at the University of Wisconsin-River Falls.
“Total cattle on feed inventory saw the largest July-to-August decline since 2008,” Boetel explains in the most recent In the Cattle Markets. “Although cattle are currently being marketed in a timely manner, there is danger that this pace will slow and currentness will slip. Given the decrease in slaughter capacity due to the Tyson fire, Saturday slaughter will need to continue to keep the market current. Keeping up with the increased supply in the fourth quarter will be a challenge.”
Further, Boetel says current placement weights may suggest placement rates accelerating at a faster clip later.
“Placements of cattle weighing less than 800 lbs. were down 7.6%, while cattle weighing over 800 lbs. saw placements increase 7.7%. Placements as a percentage of marketings were down 8% year-over-year from July 2018. Seasonally, net feedlot placements as a percentage of marketings typically increase between June and October,” Boetel says. “Given that we have seen a decrease in this number, while the number of feeder cattle remains high indicates placements will be increasing at a faster rate later this fall.”