Cattle futures sank lower again Monday, tracing the selloff in outside markets.
Before settlement, Live Cattle futures were an average of $3.58 lower. Feeder Cattle futures closed were average of $6.57 lower.
Negotiated cash fed cattle trade ranged from inactive on very light demand to a standstill through Monday afternoon, according to the Agricultural Marketing Service.
Last week, FOB live prices were $2 lower in the Texas Panhandle at $188/cwt., $2 lower to $7 higher in Kansas at $188-$195, $2 lower in Nebraska at $196 and $2 lower in the western Corn Belt at $194-$196. Dressed delivered prices were $2 lower at $310/cwt.
The weighted average five-area direct FOB live steer price was 76¢ lower last week at $194.45/cwt. The weighted average dressed delivered steer price was $1.74 lower at $309.60.
Wholesale beef prices did rebound Monday, with Choice boxed beef cutout value $4.17 higher in the afternoon at $317.94/cwt. Select was 85¢ higher at $282.34.
Grain and soybean futures extended gains Monday. Heading into the close, through Jly ’25 contracts, Corn futures were 3¢ to 4¢ higher. Kansas City Wheat futures were 2¢ to 3¢ higher. Soybean futures were mostly 11¢ to 15¢ higher.
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Major U.S. financial indices closed sharply lower again Monday with continued recession fears.
The Dow Jones Industrial Average closed 1,033 points lower. The S&P 500 closed 160 points lower. The NASDAQ was down 576 points.
West Texas Intermediate Crude Oil futures on the CME were 29¢ to 64¢ higher through the front six contracts.
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Despite the smallest beef cow herd at the beginning of this year since 1961 and record cattle prices the last couple of years, Derrell Peel, Extension livestock marketing specialist at Oklahoma State University says there continues to be little indication of herd expansion.
“Beef cow slaughter is sharply lower, down nearly 16% year over year thus far in 2024,” Peel says in his weekly market comments. “However, that level of beef cow slaughter, combined with the low beef replacement heifer inventory in 2024 implies that the beef cow herd continues to liquidate by another 0.5-1.0% in 2024. Beef cow slaughter would have to drop by roughly 22% year over year to avoid additional liquidation this year.”
Moreover, Peel notes beef replacement heifer inventories in recent years mean that there is no pipeline or momentum for herd expansion compared to previous expansions. He adds the threat of continuing or redeveloping drought is stalling rebuilding efforts.
“The beef cattle industry is smaller than needed and signals for rebuilding will continue and grow in coming months. However, herd rebuilding is likely to be slow to start and proceed quite slowly initially,” Peel says.