Cash fed cattle prices softened last week, on light volume with neither packers nor cattle feeders apparently feeling any urgency. Trade volume (5 area direct) was about a third as much as the previous week and half as much as the same week a year earlier. The average live steer price of $110.50/cwt. was $2.13 less than last week; $4.72 less in the beef at $174.05.
After pressure early in Monday’s session, though, traders pushed Live Cattle futures sharply higher, amid thin trade and led by nearby contracts and followed by Feeder Cattle. There was no change in fundamentals. Factors of support likely included continued sings of feedlot currentness, another step through heavy supplies with more success than anticipated, as well as technical buying.
Live Cattle futures closed an average of $1.10 higher (55¢ higher to $2.37 higher in spot Aug).
Feeder Cattle futures closed an average of $1.06 higher (45¢ higher in the back contract to $1.65 higher in spot Aug).
Wholesale beef values were weak on light to moderate demand and moderate to heavy offerings, according to the Agricultural Marketing Service.
Choice boxed beef cutout value was 38¢ lower Monday afternoon at $203.76/cwt. Select was 70¢ lower at $195.67.
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Major U.S. financial indices closed narrowly mixed Monday, on pressure that included lower oil prices and mixed quarterly earnings reports. Crude Oil futures (WTI-CME) were down about $3 for the remainder of the year with the notion that global trade tensions will reduce overall economic activity.
The Dow Jones Industrial average closed 44 points higher. The S&P 500 closed 2 points lower. The NASDAQ was down 20 points.
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Higher acreage for corn and soybeans forecast in last week’s monthly World Agricultural Supply and Demand Estimates should help support cattle prices. Although hay acres increased, too, price impacts are likely to be regional, at least for alfalfa, according to the Livestock Marketing Information Center (LMIC).
For perspective, LMIC analysts say estimated hay acreage increased by more than 1.2 million acres, with alfalfa representing 800,000 acres of the increase.
“Nationally, the bump in alfalfa acres is not expected to have a large impact on prices, but regionally there could be lower prices compared to that of recent years,” LMIC analysts say. “The bulk of acres added in alfalfa are not from high yielding alfalfa states. States with the largest gains came from Montana, South Dakota, North Dakota, and Idaho, which are susceptible to high rates of winterkill and shorter growing seasons. Out of 47 states reporting yields, Montana, South Dakota, and North Dakota are in the bottom 10 for alfalfa yields.”