Negotiated cash fed cattle trade was limited on light demand in Nebraska through Monday afternoon. Although too few transactions to trend, there were some live trades in the region at $135/cwt. Elsewhere, trade was at a standstill, according to the Agricultural Marketing Service.
Last week, live prices were $2-$4 lower in Kansas and Nebraska at $136-$138/cwt. They were $4 lower in the Texas Panhandle at $136 ad steady to $2 lower in the western Corn Belt at $138. Dressed prices were $2 lower in Nebraska at $218 and steady to $3 lower in the western Corn Belt at $217-$218.
Cattle futures trended lower Monday with softer cash prices, holiday-limited harvest schedules on the books and no support from outside markets.
Live Cattle futures closed an average of 34¢ lower, except for 10¢ higher in away Feb.
Feeder Cattle futures closed an average of 75¢ lower (2¢ lower at the back to $1.20 lower toward the front), except for 5¢ higher in Oct.
Choice boxed beef cutout value was 63¢ lower Monday afternoon at $262.38/cwt. Select was $2.39 higher at $250.67.
Corn futures closed mostly 1¢ to 2¢ lower.
Soybean futures closed mostly 2¢ to 6¢ higher.
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Major U.S. financial indices extended losses Monday, closing sharply lower amid growing uncertainty related to surging Covid-omicron infections.
The Dow Jones Industrial Average closed 433 points lower. The S&P 500 closed 52 points lower. The NASDAQ was down 188 points.
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“Rapidly expanding drought conditions are threatening winter wheat grazing in the Southern Plains. Dwindling forage supplies may already be causing some wheat pasture removals and could be contributing to the strong December feeder cattle auction volumes,” says Derrell Peel, Extension livestock making specialist at Oklahoma State University, in his weekly market comments.
According to the Dec. 16 U.S. Drought Monitor, 74% of the nation was abnormally dry or in some degree of drought compared to 67% a year earlier. Moreover, 55% was experiencing some degree of drought (D1-D4) compared to 49% last year.
“Without additional moisture very soon, more wheat pastures will have to be de-stocked. Current forecasts show little chances for precipitation in the region into January,” Peel says. “La Niña conditions are expected to persist through the winter, shifting the drought focus back to the Southwest and Southern Plains and potentially improving drought conditions in California and the Pacific Northwest.”
In the meantime, Peel notes the recent, heady price run.
“Optimism building in feeder cattle markets in the second half of the year has been enhanced and consolidated with the fed cattle market breaking out and moving sharply higher in the last two months of the year,” Peel explains. “Fed cattle prices have increased roughly 12% since late October and are about 29% higher compared to one year ago in December.”