Feeder Cattle futures retraced the previous session’s losses, perhaps with support from early positioning ahead of Friday’s monthly Cattle on Feed report (see below). They closed an average of 96¢ higher (60¢ to $1.52 higher).
Live Cattle futures softened an average of 21¢ lower, except for an average of 17¢ higher in the back three contracts. Pressure included reduced packer production last week and likely again this week, diluting some opportunity for cash prices to advance.
Corn futures closed 1¢ to 4¢ higher through May ‘24 and then mostly 1¢ to 2¢ lower.
Soybean futures closed 11¢ to 17¢ higher through Sep ‘23 and then mostly 7¢ to 8¢ higher.
Choice wholesale beef prices continued their recent surge higher, due in part to the aforementioned reduction in packer production. Choice Boxed beef cutout value was $1.22 higher Tuesday afternoon at $265.05/cwt. However, Select was $4.67 lower at $233.90/cwt.
Negotiated cash fed cattle trade ranged from mostly inactive on very light demand to a standstill through Tuesday afternoon, according to the Agricultural Marketing Service.
Last week, live prices were $155/cwt. in the Southern Plains and $155-$157 in Nebraska and the western Corn Belt. Dressed prices were $248.
Major U.S. financial indices firmed Tuesday, ending the recent losing streak. Perhaps bargain hunting was part of the support, given the Bank of Japan’s surprise decision to let its 10-year government bond interest rate to rise — fueling the yen higher.
The Dow Jones Industrial Average closed 92 points higher. The S&P 500 closed 3 points higher. The NASDAQ was up 1 point.
West Texas Intermediate Crude Oil futures (CME) closed 72¢ to 90¢ higher through the front six contracts.
Many analysts expect this Friday’s monthly Cattle on Feed report to be decidedly bullish.
“Early pre-report estimates have placements ranging from 94% to 98% of a year ago,” says David Anderson, Extension livestock economist with Texas A&M AgriLife Extension Service. “Lower placements are driven by fewer feeder cattle available than last year and seasonal declines. The feeder cattle index, calf and feeder cattle sales data, and cattle imports from Mexico all indicate smaller placements than last year.”
With November marketings pegged to be 1% more year over, year, Anderson says the Dec. 1 on-feed inventory is estimated at about 97.5% of last year.
“That would be the fewest December on-feed numbers since 2017,” Anderson says, in the latest issue of In the Cattle Markets. “Supplies for next year and beyond are tightening.”