Cattle futures closed mixed amid light trade to start the week with front-month Feeder Cattle under the most pressure from increasing Corn futures.
Feeder Cattle futures closed mixed, from an average of 57¢ lower across the front half of the board to an average of 17¢ higher.
Live Cattle futures closed narrowly mixed (from an average of 19¢ lower to an average of 19¢ higher.
Negotiated cash fed cattle trade was at a standstill through Monday afternoon, according to the Agricultural Marketing Service.
Last week, live prices were at $135/cwt. in the Southern Plains and Nebraska, and at $138 in the western Corn Belt. Dressed trade was at $217-$218.
The five-area direct weighted average steer price last week was $1.55 lower at $135.64. It was $1.12 lower in the beef at $217.30.
Choice boxed beef cutout value was $1.54 higher Monday afternoon at $264.48/cwt. Select was $2.23 higher at $255.18/cwt.
Nearby Corn and Soybean futures climbed on Monday, presumably in response to the continued hot and dry weather forecast in South America.
Corn futures closed 9¢ through the front three contracts and then mostly 2¢ to 3¢ higher.
Soybean futures closed 26¢ to 30¢ higher through the front five contracts and then mostly 7¢ to 10¢ higher.
Major U.S. financial indices bounced higher Monday, buoyed by optimistic early reports of holiday spending.
Holiday retail sales, excluding automotive, increased 8.5% year over year during the holiday season Nov. 1 through Dec. 24, according to Mastercard SpendingPulseTM, which measures in-store and online retail sales across all forms of payment. Online sales grew 11.0% compared to the same period last year.
“Shoppers were eager to secure their gifts ahead of the retail rush, with conversations surrounding supply chain and labor supply issues sending consumers online and to stores in droves,” says Steve Sadove, senior advisor for Mastercard and former CEO and Chairman of Saks Incorporated. “Consumers splurged throughout the season, with apparel and department stores experiencing strong growth.”
The Dow Jones Industrial Average closed 351 points higher. The S&P 500 closed 65 points higher. The NASDAQ was up 217 points.
Higher oil prices added support. West Texas Intermediate Crude Oil futures on the CME were $1.72 to $1.78 higher in the front six contracts.
More lighter-weight cattle placed in feedlots in November — compared to previous months in 2021 — speaks to several unfolding realities, according to Derrell Peel, Extension livestock marketing specialist at Oklahoma State University, in his weekly market comments.
As noted in the last Cattle Current, November feedlot placements were 3.6% more year over year, according to the latest USDA Cattle on Feed report. Peel points out the increase was comprised of cattle weighing less than 700 lbs., which were 7.0% more than the previous year. Cattle placed on feed at weights heavier than 700 lbs. were 0.7% less.
“Placements of lightweight cattle are typically high in November with seasonally large numbers of spring-born calves. However, the increase may be somewhat exaggerated this year for several reasons,” Peel explains. “Drought limitations are likely contributing to increased placements, the result of reduced opportunities for backgrounding calves this winter. Additionally, drought may also be causing fewer heifers to be held as replacements and further increasing lightweight placements.
“Finally, feedlots may be placing more lightweight cattle simply because overall feeder supplies are declining. As feeder supplies decrease, feedlots will, for a few months, be able to hold feedlot inventories by placing smaller cattle, essentially borrowing against future feeder supplies. Lightweight placements will also add more days on feed and further extend feedlot inventories for a period of time. However, as 2022 proceeds, smaller feeder cattle supplies will result in more pronounced decreases in feedlot inventories.”