Cattle futures edged lower Monday after starting the session stronger, pressured in part by Corn futures gains and last week’s limited negotiated cash fed cattle trade.
Toward the close, Live Cattle futures an average of 28¢ lower, except for an average of 41¢ higher in three contracts.
Feeder Cattle futures were an average of $1.60 lower, except for 28¢ higher in the front contract.
Negotiated cash fed cattle trade was mostly inactive on light demand through Monday afternoon, according to the agricultural Marketing Service.
Last week, FOB live prices were $2-$3 higher in Kansas at $233, $2-$3 higher in Nebraska at $232-$233 in a light test and $2-$5 higher in the western Corn Belt at $232-$235. Dressed delivered prices were steady to $5 lower in Nebraska at $360-$365 in a light test and unevenly steady in the western Corn Belt at $360-$370 in a light test.
Last week’s five-area direct weighted average FOB live fed steer price was $2.58 higher at $233.06/cwt. The weekly weighted average dressed delivered fed steer price was $2.72 lower at $362.61. Those prices were $10.11 lower and $21.07 lower year over year, respectively.
Choice boxed beef cutout value was $5.35 higher Monday afternoon at $366.73/cwt. Select was $1.78 lower at $344.45.
Grain and Soybean futures were mostly higher Monday after early pressure, as traders turned the page into a new week and month, helped along by continued confirmed Chinese soybean purchases.
Toward the close and through the front four contracts, Corn futures were 8¢ to 9¢ higher. Soybean futures were 4¢ to 5¢ higher. Kansas City HRW Wheat were 8¢ to 9¢ higher.
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Major U.S. financial indices roared higher Monday, fueled by lower Crude Oil prices and gains in communications and big-tech stocks.
The Dow Jones Industrial Average closed 693 points higher. The S&P 500 closed 110 points higher. The NASDAQ was up 540 points.
Through mid-afternoon, West Texas Intermediate Crude Oil futures (CME) were $1.80 to $4.51 lower through the front six contracts.
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Choice wholesale boxed beef prices have increased by 44.1% from the 2022 average and all-fresh retail beef prices are up 29.8%, fueled by consumer beef demand and decreased total beef production of 10.5% during the same time, says Derrell Peel, Extension livestock marketing specialist at Oklahoma State University.
Along the way, Peel notes in his weekly market comments the faster increase of ground beef prices compared to most other beef cuts. For example, he explains wholesale beef tenderloin prices have increased an average of 26.6% since 2022, while 85% lean ground beef prices are up 60.7%. He adds that average wholesale prices for the highest value steak cuts, including tenderloin, ribeye and strip loin are up 33.6%. Average wholesale prices are up 42.7% for other beef cuts, including flank steak, tri-tip, top sirloin and top round.
“The relatively faster increase in ground beef prices is a function of demand and supply factors,” Peel says. “In general, as beef prices increase, consumers are likely to rely even more heavily on ground beef to blunt the impact of higher beef prices, thus increasing ground beef demand relative to other beef products.”
On the supply side of the equation, Peel points out non-fed beef production has declined more significantly than fed beef production with cow slaughter 30.5% less since 2022 and fed cattle slaughter down 12.7% during the same period.
“Declining fed slaughter is partially offset by a sharp increase in steer and heifer carcass weights, while cow carcass weights have increased modestly,” Peel says. “Going forward, non-fed beef production may decrease more slowly as the beef cow herd and cow slaughter stabilize. However, fed beef production is expected to continue decreasing with tighter fed cattle supplies expected through 2027 at least.”