Negotiated cash fed cattle trade was at a standstill through Monday afternoon, according to the Agricultural Marketing Service.
Last week, live prices were $1 lower in the Texas Panhandle at $179/cwt., $2 lower in Kansas at $178, steady in Nebraska at $182-$185 and $2-$4 lower in the western Corn belt at $180-$183. Dressed prices were steady at $290.
The weighted average five-area direct fed steer price last week was $181.33/cwt. on a live basis, which was $1.24 lower than the previous week. The average fed steer price in the beef was 47¢ lower at $289.34.
Choice boxed beef cutout value was 62¢ higher Monday afternoon at $328.34/cwt. Select was 67¢ higher at $294.30/cwt.
Cattle futures mostly held their ground Monday.
Feeder Cattle futures closed an average of 63¢ higher (32¢ to $1.17 higher).
Live Cattle futures closed narrowly mixed, from an average of 17¢ lower in the front four contracts to an average of 34¢ higher.
Corn futures firmed some Monday with likely support from rallying Soybeans.
Corn futures closed mixed, mostly 2¢ lower to 1¢ higher.
Soybean futures closed mostly 22¢ to 31¢ higher, building on Fridays Acreage report.
KC HRW Wheat closed mostly 1¢ to 6¢ lower.
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Major U.S. financial indices edged higher Monday after the holiday-shortened trading session.
The Dow Jones Industrial Average closed 10 points higher. The S&P 500 closed 5 points higher. The NASDAQ was up 28 points.
West Texas Intermediate Crude Oil futures (CME) closed 85¢ to $1.02 lower through the front six contracts.
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Saying that cattle markets have been bullish so far this year is an understatement.
In his weekly market comments, Derrell Peel, Extension livestock marketing specialist at Oklahoma State University explains Oklahoma auction prices for steer calves weighing less than 600 pounds averaged 41.9% higher year over year in June; 39.7% higher for feeder steers weighing more than 600 pounds. He adds that the five-area fed cattle price averaged 30.3% higher year over year over the past four weeks.
“The June cattle on feed report showed that feedlot inventories have been lower for nine consecutive months,” Peel says. “The decline in feedlot inventory has been relatively slow with May feedlot placements higher than expected based on lingering drought impacts and strong feeder demand as feedlots attempt to maintain inventories. However, feeder supplies and feedlot numbers will continue to decline as the reality of smaller cattle supplies builds. Increased heifer retention is likely to squeeze feeder supplies more sharply in the second half of the year.”
As it is, Peel points out beef production through the first 24 weeks of this year was 4.9% less than last year’s record pace. So far this year, he says yearling slaughter (steer + heifer) is 3.0% less year over year with steer slaughter down 4.7% and heifer slaughter down 0.4%.
“However, heifer slaughter is down 4.9% year over year in the last four weeks and combines with a 5.9% decrease in steer slaughter to reduce total yearling slaughter 5.5% in the most recent four weeks of data,” Peel explains. “Total cow slaughter is down 4.4% for the year to date with a 12.1% decrease in beef cow slaughter … Bull slaughter is down 8.4% thus far in 2023.”
The primary question about markets in the second half of the year revolves around the extent to which herd rebuilding begins — increased heifer retention and continued reductions in beef cow slaughter, according to Peel. He notes producer expectations and remaining drought conditions will impact the timing of herd rebuilding efforts.
“The upcoming July Cattle on Feed report (with quarterly steer and heifer feedlot inventories) and the July Cattle report are expected to provide important clues as to how cattle market conditions may change in the second half of the year,” Peel says.