Cattle futures closed mostly higher Tuesday, supported by positive fundamentals.
Live Cattle futures closed average of 58¢ higher, except for an average of 30¢ lower in the front two contracts.
Feeder Cattle futures closed an average of $2.22 higher, except for 35¢ higher in spot Mar.
Negotiated cash fed cattle trade ranged from a standstill in the South to mostly inactive on light demand in the North, with too few transactions to trend, through Tuesday afternoon, according to the Agricultural Marketing Service.
Last week, FOB live prices were $180/cwt. in the Southern Plains, $181 in Nebraska and $180 in the western Corn Belt. Dressed delivered prices were mostly $287 in Nebraska and $285 in the western Corn Belt.
Choice boxed beef cutout value was 28¢ higher Tuesday afternoon at $297.37/cwt. Select was 42¢ higher at $287.82/cwt.
Apparent short covering helped lift grain futures Tuesday.
Corn futures closed 1¢ to 4¢ higher.
KC HRW Wheat futures closed 14¢ to 19¢ higher through Dec ’25.
Soybean futures closed 7¢ to 10¢ higher.
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Major U.S. financial indices closed lower Tuesday, led by tech stocks.
The Dow Jones Industrial Average closed 64 points lower.
The S&P 500 closed 30 points lower. The NASDAQ was down 144 points.
CME WTI Crude Oil futures closed $1.01 to $1.42 lower through the front six contracts.
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Plenty of folks will be watching for Friday’s Monthly Cattle on Feed report to see how much placements decline year over year. Although placement are widely anticipated to be less, Derrell Peel, Extension livestock marketing specialist at Oklahoma State University says the Feb. 1 on-feed inventory likely will be higher again.
“Feedlots are quite full in many cases and are dealing with muddy conditions and lost performance due to winter weather in December and January,” Peel says in his weekly market comments. “The sluggish pen conditions resulted in sluggish cash fed market conditions with fed prices dropping back about a $1.00/cwt. this past week to $180/cwt. As feedlots clean up pens, on-feed numbers are expected to tighten up in the coming months as the reality of limited feeder supplies becomes apparent.”
Peel points out estimated feeder supplies were 4.2% less year over year at the beginning of January, the least since 1972.
So far this year, Peel notes steer and heifer slaughter is 3.3% less year over year and beef cow slaughter 15.7% less.
“Steer and heifer carcass weights have dropped sharply in recent weeks as a result of earlier winter weather. Current steer carcass weights are close to year-ago levels at 909 pounds, having dropped from highs of 942 pounds in late December,” Peel says. “Although carcass weights dropped slightly on an annual basis in 2023, there is a good chance that carcass weights will increase modestly this year with cheaper cost of gain in feedlots and both cattle feeders and packers having incentives to find pounds of beef wherever they can in the face of decreasing cattle supplies.”
Beef production is projected to decrease roughly 5% year over in 2024, according to Peel. Beef production was 4.7% less year over year in 2023.