Feeder Cattle futures rallied an average of $2.13 higher Tuesday, propelled by lower Corn futures and ongoing cash demand strength.
Corn futures closed 13¢ to 15¢ lower through new-crop contracts on weather pressure and then mostly 7¢ to 8¢ lower.
Soybean futures closed 17¢ to 22¢ lower through Jly ‘23 and then mostly 9¢ to 12¢ lower.
Positive outside markets, Feeder Cattle and higher wholesale beef values helped pull Live Cattle futures an average of 48¢ higher.
Choice Boxed beef cutout value was $2.02 higher Tuesday afternoon at $272.57/cwt. Select was $1.07 higher at $243.73/cwt.
Negotiated cash fed cattle trade was $1 lower in the Texas Panhandle on Tuesday at $136/cwt. with moderate trade and light to moderate demand.
Elsewhere, trade was mostly inactive on light demand with too few transactions to trend, according to the Agricultural Marketing Service.
Last week, live prices were $137 in Kansas, $140-$145 in Nebraska and $143.50 to $145.00 in the western Corn Belt. Dressed prices were $230 in Nebraska and $228-$230 in the western Corn Belt.
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Major U.S. financial indices rallied Tuesday, with various analysts attributing the surge to investors betting the bottom is in or near.
The Dow Jones Industrial Average closed 754 points higher. The S&P 500 closed 105 points higher. The NASDAQ was up 353 points.
West Texas Intermediate Crude Oil futures on the CME closed 73¢ to $1.62 higher through the front six contracts.
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USDA’s Economic Research Service (ERS) raised the expected feeder steer price (750-800 lbs., Oklahoma City) for the remainder of this year based on stronger than expected placements in May, current price data and tighter supplies than expected.
In the latest Livestock, Dairy and Poultry Outlook, ERS forecast the average feeder steer price $2 higher for the third quarter at $168/cwt., $1 higher in the fourth quarter at $171 and $1 higher for the annual average price at $163. Likewise, the expected first-quarter price increased $1 to $169. Next year’s annual average price is $199.25.
As for fed steer prices, ERS analysts point out the five-area average price July 10 was $22 higher year over year at $144.35/cwt., supported by the faster slaughter pace, lighter carcass weights and strong beef prices.
The fed steer price was projected at $139/cwt. in the third quarter and at $141.30 for the annual average. Next year’s annual average price was forecast at $153.
“Conditions continue to elevate beef cow culling rates and placement of calves on feed at a faster than expected pace,” ERS analysts say. “Lower expected carcass weights in second-half 2022 are more than offset by higher expected fed cattle slaughter in the fourth quarter. This raised projected 2022 production slightly, however, lower weights were carried into first-quarter 2023, marginally reducing next year’s production.”