Cattle futures extended gains Monday, buoyed by sharply lower Corn futures, and an apparently neutral view of Friday’s Cattle on Feed report.
Feeder Cattle futures closed an average of $1.47 higher (85¢ to $2.30 higher).
Live Cattle futures closed an average of 63¢ higher.
Corn and Soybean futures eroded Monday, apparently mostly due to moisture in South America over the weekend.
Corn futures closed 8¢ to 10¢ lower through Jly ‘24 and then mostly 2¢ to 3¢ lower.
Soybean futures closed mostly 10¢ to 13¢ lower.
KC Wheat on the CME closed 22¢ to 29¢ lower.
Negotiated cash fed cattle trade ranged from mostly inactive on very light demand to a standstill through Monday afternoon, according to the Agricultural Marketing Service.
Last week, live prices were $155/cwt. in the Southern Plains and Nebraska, and $156-$158 in the western Corn Belt. Dressed prices were $248-$250.
Choice boxed beef cutout value was 28¢ lower Monday afternoon at $271.44/cwt. Select was $1.94 lower at $254.49/cwt.
Major U.S. financial indices bounced higher Monday with more investor speculation that the Fed may be ready to begin easing interest rate increases.
The Dow Jones Industrial Average closed 254 points higher. The S&P 500 closed 47 points higher. The NASDAQ was up 223 points.
West Texas Intermediate Crude Oil futures (CME) closed narrowly mixed through the front six contracts, from 2¢ lower to 37¢ higher.
Reflecting on Friday’s Cattle on Feed report, Derrell Peel, Extension livestock marketing specialist at Oklahoma State University points out the feedlot heifer inventory Jan. 1 was 0.5% less year over year, the first decrease since July 2021.
“Large heifer numbers in feedlots supported the 4.8% year over year increase in heifer slaughter in 2022 and was the largest heifer slaughter total since 2004,” Peel says. “The decrease in feedlot heifers does not, at this point, reflect heifer retention but simply a lack of heifers due to large heifer slaughter the past two years.”
Peel also notes feedlot inventories have declined four consecutive months. The Jan. 1 inventory for feedlots with 1,000 head or more capacity was 11.68 million head, which was 2.9% less than the prior year.
“It looks increasingly like the early November seasonal peak will hold,” Peel says. “If so, the November total was 4.1% below the previous seasonal peak in February 2022 and suggests sharply tighter feedlot numbers going forward.”