Cattle futures faded early pressure Tuesday to close higher amid light holiday trade. Support included last week’s higher cash fed cattle prices and the weekend’s harsh weather in parts of cattle feeding country. Stronger outside markets helped, as did the fact that traders had apparently already factored in last week’s Cattle on Feed Report, which showed more placements than analyst expectations ahead of the report.
Feeder Cattle futures closed an average of $1.34 higher (17¢ to $2.20 higher).
Live Cattle futures closed an average of $1.11 higher (52¢ to $1.87 higher).
Negotiated cash fed cattle trade was at a standstill in all regions through Tuesday afternoon, according to the Agricultural Marketing Service.
Last week, FOB live prices were $1 higher in the Texas Panhandle at $171/cwt., steady to $1 higher in Kansas at $171, $3-$4 higher in Nebraska at $171-$172 and $1-$3 higher in the western Corn Belt at $170. Dressed delivered prices were $2-$3 higher in Nebraska at $270 and $3 higher in the western Corn Belt at $270.
Last week’s five-area direct weighted average FOB live steer price was $1.80 higher at $170.51/cwt. The weighted average dressed delivered steer price was $2.85 higher at $270.38.
Choice boxed beef cutout value was 38¢ higher Tuesday afternoon at $293.31/cwt. Select was 4¢ higher at $261.19/cwt.
Grain futures closed higher Tuesday, helped along by competitive pricing in the global market, as well as the recently weaker U.S. dollar.
Corn futures closed mostly 3¢ to 6¢ higher.
KC HRW Wheat futures closed 18¢ to 21¢ higher.
Soybean futures closed 7¢ to 13¢ higher.
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Major U.S. financial indices closed higher Tuesday with follow-through support from last week.
The Dow Jones Industrial Average closed 159 points higher. The S&P 500 closed 20 points higher. The NASDAQ was up 81 points.
West Texas Intermediate Crude Oil futures (CME) closed $1.78 to $2.01 higher through the front six contracts.
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Although Friday’s Cattle on Feed report revealed the Dec. 1 feedlot inventory was 2.7% more than a year earlier, total feedlot placements from June through November were 0.3% less than the same period last year, according to Derrell Peel, Extension livestock marketing specialist at Oklahoma State University.
“This means that the larger feedlot inventory now is due to a slower feedlot turnover rate and not because of increased total feedlot production,” Peel says in his weekly market comments. “This is reflected in November feedlot marketings that were down 7.4% year over year. A slower feedlot marketing rate raises concerns that feedlots may not be staying current in marketings.”
Peel also points out weekly average steer carcass weights were record large over the past month at 940 pounds. However, he says, “Indications are that the heavier carcass weights reflect deliberate marketing intentions (feeding cattle longer) rather than a systemic lack of currentness in feedlots.”