Commodity and equity markets saw widespread selling Wednesday on the news that Fitch Ratings downgraded the long-term credit rating for United States.
The lack of weekly cash fed cattle price direction and profit taking may also have pressured Cattle futures.
Live Cattle futures an average of 86¢ lower (50¢ lower at the back to $1.47 lower in spot Aug).
Feeder Cattle futures closed an average of $1.15 lower (57¢ lower toward the back to $1.80 lower toward the front).
Corn futures closed mostly 2¢ to 8¢ lower.
KC HRW Wheat closed 10¢ to 17¢ lower through Dec ‘24 and then 9¢ lower.
Soybean futures closed mostly 14¢ to 20¢ lower through Jly ‘24 and then mostly 8¢ to 9¢ lower.
Negotiated cash fed cattle trade ranged from inactive on very light demand to a standstill through Wednesday afternoon, with too few transactions to trend, according to the Agricultural Marketing Service.
Last week, live FOB prices were $178-$179/cwt. in the Southern Plains, $186 in Nebraska, and $185-$186 in the western Corn Belt. Dressed delivered prices were $292-$295.
Choice boxed beef cutout value was $2.92 lower Wednesday afternoon at $303.18/cwt. Select was $2.13 lower at $277.47/cwt.
Major U.S. financial indices closed lower Wednesday, pressured by the aforementioned lowering of the U.S. credit rating.
The Dow Jones Industrial Average closed 348 points lower. The S&P 500 closed 63 points lower. The NASDAQ was down 310 points.
West Texas Intermediate Crude Oil futures (CME) closed $1.53 to $1.88 lower through the front six contracts.
Strong demand and underlying U.S. economic strength are fueling cattle prices even more than snugger cattle supplies and beef production, says Stephen Koontz, agricultural economist at Colorado State University, in the latest issue of In the Cattle Markets from the Livestock Marketing Information Center (LMIC).
“Within the important underlying fundamentals, slaughter weights are seasonally tight, cattle on feed over 120 days are very tight compared to prior years, packer margins and feedlot margins are very strong. These are all bullish signals,” Koontz says. “At some point in the future, we will need to be concerned about competing meat supplies, trade volumes, the strength of the dollar, and interest rates versus inflation. But this summer the cattle and beef market just continue to show dramatic strength. And this is largely due to the underlying strength in the domestic economy.”
Koontz notes cattle markets have the strength to move higher but there are signs of slowing momentum.