Cattle futures tried to hold recent gains Monday but were mostly lower as traders began the new week and month.
Toward the close, Live Cattle futures were an average of $1.21 lower (15¢ lower to $2.07 lower). Feeder Cattle futures were an average of $1.68 lower, except for an average of 58¢ higher in three contracts.
Negotiated cash fed cattle trade was inactive on light demand in all major cattle feeding regions through Monday afternoon, according to the Agricultural Marketing Service.
Last week, FOB live prices were $4-$9 lower in the Texas Panhandle at $215-$220/cwt., mostly $2-$4 lower in Kansas at mainly $220, mostly $8 lower in Nebraska at mainly $210 and $7-$8 lower in the western Corn Belt at mostly $208-$210. Dressed delivered prices were $10-$15 lower in Nebraska at $330 and $12-$17 lower in the western Corn Belt at $328-$330.
The five-area direct weighted average FOB live fed steer price last week was $5.88 lower at $211.52. The five-area direct weighted average dressed delivered fed steer price was $13.98 lower at $329.38.
Choice boxed beef cutout value was $2.07 higher Monday afternoon at $368.89/cwt. Select was $6.83 higher at $357.88.
Corn and Soybean futures were lower Monday on likely profit taking.
Toward the close and through Jly contracts, Corn futures were 2¢ lower. KC HRW Wheat futures were fractionally lower to 6¢ lower. Soybean futures were 8¢ to 10¢ lower.
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Major U.S. financial indices sagged lower Monday, pressured by cryptocurrency and AI stocks.
The Dow Jones Industrial Average closed 427 points lower. The S&P 500 closed 36 points lower. The NASDAQ was down 89 points.
Though mid-afternoon, West Texas Intermediate Crude Oil futures (CME) were 84¢ to 91¢ higher through the front six contracts.
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Derrell Peel, Extension livestock marketing specialist at Oklahoma State University emphasizes the same fundamentals exist today as before the government shutdown and before the federal government’s announced intention to lower beef prices.
“The October and November Cattle on Feed reports show continued slow erosion of feedlot inventories with placements and marketings showing a more dramatic picture of tight cattle supplies,” Peel explains, in his weekly market comments. “October placements were the lowest in the data series back to 1996 and the 12-month moving average of placements shows that average feedlot placements the past year have been the lowest since July 2016.”
Similarly, Peel says October feedlot marketings were the lowest for the month since 2015 and feedlot inventories have declined for 12 consecutive months. He explains feedlot inventories are expected to continue decreasing with smaller feeder cattle supplies, the absence of Mexican feeder imports and heifer retention still ahead.
“Steer and heifer carcass weights are higher again this year but not enough to offset declining slaughter,” Peel says. “Fed beef production is down 2.7% so far this year and, combined with an 8.2% year-over-year decrease in non-fed beef production, leads to a decrease in total beef production of 3.6% year over year.” He notes beef production has been 5.8% less year over year for the past 24 weeks.