Cattle futures closed narrowly mixed Tuesday in the face of higher grain futures and the lack of cash direction.
Feeder Cattle futures closed an average of 18¢ lower, except for unchanged and 32¢ higher toward the front.
Live Cattle futures closed an average of 35¢ higher.
Corn and Wheat futures rebounded Tuesday with likely short covering.
Corn futures closed 5¢ to 10¢ higher through Jly ‘24 and then mostly 2¢ higher.
KC HRW Wheat futures closed mostly 14¢ higher.
Soybean futures firmed, too, closing fractionally lower to 2¢ lower through Sep ‘24 and then 1¢ to 5¢ 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 $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 $1.80 lower Tuesday afternoon at $269.64/cwt. Select was $2.10 lower at $252.39/cwt.
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Major U.S. financial indices wobbled to a mixed close Tuesday amid up-and-down quarterly earnings reports.
The Dow Jones Industrial Average closed 104 points higher. The S&P 500 closed 2 points lower. The NASDAQ was down 30 points.
West Texas Intermediate Crude Oil futures (CME) closed $1.45 to $1.49 lower through the front six contracts, from 2¢ lower to 37¢ higher.
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With the national hay supply 9% less year over year Dec. 1, and 6% less than the previous record low, analysts with the Livestock Marketing Information Center (LMIC) say record and near-record hay prices will likely continue through most of this year.
“Hay prices have reached record levels in the last two years, outpacing the last drought. The hay stock data confirmed supplies are now tighter than they were back in 2012,” LMIC analysts say, in the latest Livestock Monitor. “Absent an exceptional early hay crop, prices are expected to hold near or above record levels through most of 2023. This will add to the decision of cow-calf producers and affect their ability to maintain/expand/contract their breeding herds. Our assessment is that forage/feed availability conditions are unlikely to allow for expansion in 2023.”
As it is, LMIC analysts explain hefty feedlot placements last year, may have left relatively few cattle to place after winter grazing, which could create a significant hole in supplies.
“During the last major drought season in 2011, cattle on feed dropped 1.2 million head over the summer compared to January 1 levels, and in 2012, cattle on feed numbers dropped about 800,000 head. If cattle on feed this year drops similar to those years, that would put the summer low between 9.0-9.4 million head on feed,” according to the LMIC folks.