Cattle futures mostly strengthened Tuesday, supported by bullish outside markets.
Before settlement, Live Cattle futures were an average of 57¢ higher. Feeder Cattle futures were an average of 72¢ higher, except for unchanged in spot Aug and an average of 9¢ lower in the back two contracts.
Negotiated cash fed cattle trade ranged from mostly inactive on light demand to a standstill through Tuesday afternoon, with too few transactions to trend, according to the Agricultural Marketing Service.
Last week, FOB live prices were $188/cwt. in the Southern Plains, $198 in Nebraska and mostly $198 in the western Corn Belt. Dressed delivered prices were $312 in Nebraska and mostly $312 in the western Corn Belt.
Choice boxed beef cutout value was $2.23 lower Tuesday afternoon at $319.26/cwt. Select was $3.23 lower at $301.59/cwt.
Corn and Soybean futures firmed Tuesday with likely short covering. Toward the close and through Jly ’25 contracts, Corn futures were 3¢ to 5¢ higher. Kansas City Wheat futures were 6¢ to 7¢ lower. Soybean futures mostly 3¢ to 5¢ higher.
******************************
Major U.S. financial indices closed higher again Tuesday, amid multi-sector support and growing optimism about interest rate cuts.
The Dow Jones Industrial Average closed 742 points higher. The S&P 500 closed 35 points higher. The NASDAQ was up 36 points.
Heading into the close, West Texas Intermediate Crude Oil futures on the CME were 95¢ to $1.09 lower through the front six contracts.
******************************
Feedlot net returns through August are projected to be positive, based on the latest Historical and Projected Kansas Feedlot Net Returns from Kansas State University (K-State).
“Steers sold in June are estimated to have experienced positive net returns of $51.12/head. This reverses a six-month trend of losses for the modeled feedlot situation,” explains Glynn Tonsor, K-State agricultural economist, in the latest issue of In the Cattle Markets. “Several factors underlie the improved returns in June. Steers sold in June are modeled to have $111/cwt cost of gain which is well below the $122 average for the first five months of 2024. Similarly, a June fed cattle sales price of $185/cwt being above the $182 average for the first months of 2024 further aided in turning June net returns positive.”
Tonsor notes the data series reflects a cash situation, presumes no ongoing hedging of feed or cattle price movement, and is intended to provide a barometer of profitability trends rather than precise estimates for any given feedlot situation.
Beyond August net feedlot returns are projected to be negative through March of next year.
“The projected switch to negative returns primarily reflects increased feeder cattle placement prices negating comparatively small increases in outgoing fed cattle sales prices,” Tonsor says. “While each operation certainly has unique considerations to make in using this barometer of profit trends, the broader dynamics in both feed and cattle markets will remain worth watching in coming months as discussions around relative cattle supplies and status of beef demand strength evolve.”