Higher outside markets and lower Corn futures, both due in part to less geopolitical tension in Eastern Europe, helped fuel gains in Cattle futures Tuesday.
Live Cattle futures closed an average of 52¢ higher.
Feeder Cattle futures closed an average $1.47 higher.
Corn futures closed 10¢ to 17¢ lower through the front four contracts and then mostly 5¢ to 8¢ lower.
Soybean futures closed mostly 9¢ to 18¢ lower through Jan ’23 and then 3¢ lower to 3¢ higher.
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 at $140/cwt. in the Southern Plains and Nebraska; $140-$142 in the western Corn Belt. Dressed trade was at $224.
Choice Boxed beef cutout value was $3.59 lower Tuesday afternoon at $270.37/cwt. Select was 93¢ lower at $267.82.
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Easing tensions between Russia and Ukraine, at least for the day, seemed to be the primary driver behind sharply higher major U.S. financial indices Tuesday.
The Dow Jones Industrial Average closed 422 points higher. The S&P 500 closed 69 points higher. The NASDAQ was up 348 points.
Crude Oil futures (WTI-CME) were $3.10 to $3.39 lower through the front six contracts.
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USDA’s Economic Research Service (ERS) increased expectations for feeder cattle prices this year, in the latest Livestock Dairy and Poultry Outlook.
Although projected prices were reduced $1 to $158/cwt. in the first quarter, they were increased $2 for the remainder of the year to $158 in the second quarter, $162 in the third quarter and $167 in the fourth quarter. The estimated annual price for feeder steers (750-800 lbs., Oklahoma City) increased $1.25 to $161.25.
ERS analysts note, prices at Oklahoma National Stockyards in January were $23.84 more (+17.8%) than a year earlier at $157.78.
As noted in Cattle Current recently, ERS also increased the projected five-area direct average fed steer prices for this year to $137.50.
“Compared to last year, beef cattle producers are indicating their intentions to retain 3% fewer heifers for beef cow replacement, with the largest reductions in Texas (-110,000 head) and Montana (-50,000 head),” say ERS analysts, referring to the Jan. 1 inventory. “The number of heifers expected to calve during the year is also down 3%. The lower number of heifers retained implies that the national herd is unlikely to expand. A similar pattern is reflected on the dairy side, with milk cow numbers down 1% and heifers for milk-cow replacement down 3%.”
There were 719,000 fewer beef cows at the beginning of this year than the previous year, according to the Cattle report. Deepest liquidation occurred in South Dakota (-189,000), Texas (-160,000), Missouri (-94,000), and Montana (-90,000 head).
“Poor pasture and range conditions were the primary causes of this contraction in the West and Plains regions,” ERS analysts say. “Hay stocks Dec. 1, 2021, were also down 6% from a year ago, and tight supplies in parts of the country may have influenced producers’ ability to maintain cow herds.”