Feeder Cattle futures rose an average of $1.08 Wednesday, bolstered by strong cash demand.
Live Cattle futures edged an average of 13¢ higher, except for an average of 6¢ lower in the front two contracts, despite the weaker cash outlook for the week and wobbly beef prices.
Negotiated cash fed cattle trade was moderate on moderate demand in Nebraska through Wednesday afternoon, according to the Agricultural Marketing Service. Live prices were $1.00-$5.50 lower at $138/cwt. Dressed prices were $2 lower at $225.
Elsewhere, trade ranged from limited on light demand to mostly inactive on very light demand.
Prices in the Southern Plains were $1 lower on Tuesday at $135.
In the western Corn Belt last week, prices were $141-$145 on a live basis and $227-$232 in the beef.
Choice Boxed beef cutout value was $1.12 lower Wednesday afternoon at $267.99/cwt. Select was $2.07 lower at $241.81/cwt.
Higher oil prices helped lift Soybean futures mostly 15¢ to 26¢ higher while Corn futures were up mostly 3¢.
Major U.S. financial indices closed higher Wednesday, after the Fed raised lending rates by another 75 basis points. Apparently, a wide swath of investors believe that inflation can be controlled while avoiding a recession.
The Dow Jones Industrial Average closed 436 points higher. The S&P 500 closed 102 points higher. The NASDAQ was up 469 points.
CME WTI Crude Oil futures closed $2.28 to $2.50 higher through the front six contracts.
Inflation is now the key risk to meat and poultry consumption, as the impact of COVID-19 on consumer food spending is diminishing, according to The Quarterly from CoBank’s Knowledge Exchange. Retail meat and poultry prices were 18% higher in May compared to 2021 and both spot market supplies and freezer inventories are below pre-pandemic levels. The combination of tight supplies and steady demand kept meat prices 20% higher than the five-year average for the March-May period, say CoBank analysts.
Among the report highlights:
- Effects from the pandemic and Ukraine war continue to reverberate through the global economy. Food and energy prices remain high, though prices for underlying commodities have lost upward momentum as economic fears rise.
- After more than two years, Covid-related supply chain complications are finally easing and various metrics indicate improvements to supply chain performance both domestically and globally. However, those improvements have been modest and agricultural supply chains in particular remain broadly mired in dysfunction.
“Warehouse and inventory costs are still rising at near-peak levels, and transportation costs are rising at a much higher rate than pre-pandemic,” says Dan Kowalski, vice president of CoBank’s Knowledge Exchange. “Grain rail car availability and prices were at multi-year lows and highs, respectively, in the second quarter. Although as consumer purchases of goods continues to soften, supply chains will slowly recover.”
- Declining cattle supplies are expected to converge with excess processing capacity over the next 12-18 months, which should contribute to more favorable conditions for producers.