Cattle Current Daily—Jan. 4, 2022

Cattle Current Daily—Jan. 4, 2022

Negotiated cash fed cattle trade ranged from a standstill to mostly inactive with very light demand through Monday afternoon, according to the Agricultural Marketing Service.

Last week live prices were at $138/cwt. in the Southern Plains and $140 in Nebraska and the western Corn Belt. Dressed trade was at $220-$222.

The five-area direct average steer price last week of $139.59/cwt. on a live basis was $3.95 higher than the previous week. The average steer price in the beef was $3.58 higher at $220.89.

Year-to-date estimated total cattle slaughter through Dec. 27 was 32.66 million head, according to USDA. That was 958,000 head more (+3.0%) than a year earlier. Total estimated beef production of 27.05 billion lbs. was 694.4 million lbs. more (+2.6%).

Cattle futures eased lower Monday awaiting cash direction.

Live Cattle futures closed an average of 38¢ lower, not counting newly minted away-Jun.

Feeder Cattle futures closed an average of 45¢ lower.

Choice boxed beef cutout value was 77¢ higher Monday afternoon at $266.03/cwt. Select was 67¢ higher at $258.90/cwt.

Corn futures closed mostly 1¢ to 2¢ higher, except for fractionally lower to 4¢ lower in the front four contracts.

Soybean futures closed 12¢ to 16¢ higher through Sep ‘23 and then 7¢ to 8¢ higher.

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Major U.S. financial indices climbed higher Monday, buoyed by tech stocks.

The Dow Jones Industrial Average closed 246 points higher. The S&P 500 closed 30 points higher. The NASDAQ was up 187 points.

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“During December the price for 500-600-lb. steers in South Dakota briefly averaged above $190/cwt. for a couple of weeks, a level last observed in early 2016,” says Matthew Diersen, risk and business management specialist at South Dakota State University, in the latest issue of In the Cattle Markets. “The value of calves depends on the expectations for their ultimate value as finished animals. Thus, the price of calves expected in 2022 depends on where the trade thinks the price of fed cattle will be in mid-2023. The LMIC (Livestock Marketing Information Center) projections have the price of fed cattle higher in 2022 than in 2021 with a further increase expected in 2023. That bodes well for calf price expectations and the LMIC projections are for higher calf prices in 2022, but prices can still fluctuate.”

On the other side of the equation, Derrell Peel, Extension livestock marketing specialist at Oklahoma State University stresses the need to focus on feed cost management in order to capitalize on the optimistic revenue outlook.

“In part, marketing forage involves considering cattle production and marketing alternatives that represent higher value for forage,” Peel explains, in his weekly market comments. “For cow-calf producers, this includes considerations for marketing calves at weaning or retaining calves for backgrounding/stocker production as well as marketing cull breeding animals.

“The market environment in 2022 may provide more possibilities with reduced cattle numbers favoring weaned calf production and marketing, yet at the same time, higher grain prices and elevated feedlot cost of gain increase the value of added forage-based weight gain on feeder cattle. Producers will have more options and potential to add value, and planning now can improve returns to cattle and forage production later.”

You can watch Peel share his market outlook for next year here.

 

2022-01-03T21:09:17-06:00

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