Uncertainty about the pace of packer production continued to weigh on Live Cattle futures Tuesday, as wholesale beef prices continue to climb for the same reason. Sharply lower outside markets added to bearish sentiment.
Live Cattle futures closed an average 37¢ lower.
Choice Boxed beef cutout value was $1.63 higher Tuesday afternoon at $289.49/cwt. Select was $1.34 higher at $278.39.
Feeder Cattle futures drifted lower with the lack of support from the Live side. They closed an average 62¢ lower (20¢ lower at the back to $1.25 lower at the front).
Negotiated cash fed cattle trade was slow on light to moderate demand in Nebraska through Tuesday afternoon, according to the Agricultural Marketing Service. Although too few transactions to trend, early trade was steady at $137/cwt. on a live basis and $128 in the beef.
Elsewhere, trade ranged from mostly inactive on light demand to a standstill.
Last week, live prices were at $136-$137 in the Texas Panhandle, $135-$136 in Kansas and $138 in the western Corn Belt, where dressed trade was at $218.
******************************
Major U.S. financial indices closed sharply lower Tuesday as investors fretted over anemic bank earnings and higher treasury bond yield rates.
The Dow Jones Industrial Average closed 543 points lower. The S&P 500 closed 85 points lower. The NASDAQ was down 386 points.
******************************
Hay production and stocks continue lower, according to the most recent USDA Crop Production report.
All hay stocks Dec. 1 of 79.0 million tons was 5.0 million tons less (-6.0%) than the same time a year earlier.
“Drought stricken Western states saw the most notable declines in hay stocks,” say analysts with the Livestock Marketing Information Center, in the latest Livestock Monitor (LMIC). “Oregon, Montana, North Dakota, South Dakota, and Arizona all posted declines in hay stocks over 40% from the prior year. Minnesota was down 35% while Wyoming, Utah, and California reported declines between 20%-27%. Nevada, Colorado, New Mexico, Texas, Oklahoma, and Nebraska all posted 4%-28% increases from a year ago.”
In terms of production, LMIC analysts explain, all hay acres in 2021 declined 2.9% to nearly 50.7 million acres, which was the lowest since 1974.
“Alfalfa hay prices have been over $200 per ton for the last five months while other hay prices have averaged in the upper $140-per-ton range for the last several months,” say LMIC analysts. “Although recent alfalfa and other hay prices are not at record levels, they are still near some of the highest on record. Hay supplies will continue to be lower, especially in the Western U.S., and hay prices are expected to remain elevated which will likely limit livestock producer profitability in the near term.”