Cattle futures extended gains Monday, supported by Friday’s friendly Cattle on Feed report (see below).
Toward the close, Live Cattle futures were an average of 91¢ higher. Feeder Cattle futures were an average of $2.13 higher.
Negotiated cash fed cattle trade was mostly inactive on light demand in all cattle feeding regions through Monday afternoon, according to the Agricultural Marketing Service.
Last week, FOB live prices were $1-$2 lower in Kansas at $228-$229/cwt. and unevenly steady in Nebraska and the western Corn Belt at $228. Dressed delivered prices were $356-$358, which was $3-$6 higher in the western Corn Belt and mainly $3 higher in Nebraska.
The five-area direct weighted average FOB live fed steer price last week was 22¢ lower at $227.97. The five-area-direct weighted average dressed delivered fed steer price was $3.50 higher at $357.12.
Choice boxed beef cutout value was $1.24 higher Monday afternoon at $362.87/cwt. Select was $4.67 higher at $350.69.
Grain and soybean futures were higher Monday in what appeared to be a relief rally.
Toward the close, through near Jly Corn futures were 2¢ to 3¢ higher. KC HRW Wheat futures were 5¢ higher. Soybean futures were 3¢ to 4¢ higher.
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Major U.S. financial indices closed higher Monday, supported by AI stocks.
The Dow Jones Industrial Average was up 227 points. The S&P 500 closed 43 points higher, and the NASDAQ closed 121 points higher.
Through mid-afternoon, West Texas Intermediate Crude Oil futures (CME) were $1.22 to $1.41 higher through the front six contracts.
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Derrell Peel, Extension livestock marketing specialist at Oklahoma State University provides further context to tightening feeder cattle supplies, in his weekly market comments.
Reflecting on the latest Cattle on Feed report, Peel explains, “Feedlot inventories have declined year over year for 13 consecutive months, leading to a 12-month moving average total the lowest since October 2018.”
As mentioned in yesterday’s Cattle Current, cattle on feed Dec. 1 of 11.7 million head were 255,000 head fewer (-2.1%) than the same month last year.
Moreover, Peel explains the rather slow decline in feedlot inventories masks a sharper drop in feedlot placements and marketings.
“Feedlot placements in November were down 11.2% year over year and have decreased 8.6% in the last six months,” Peel says. “… As of November, average of feedlot placements the past year are at the lowest level since April 2016.”
Similarly, as of November, feedlot marketing had declined 7.9% during the past six months and average marketing were the least since August of 2106, according to Peel.