Only 596 head were offered in the weekly Fed Cattle Exchange Auction. There were no sales, but two lots of heifers (287 head) passed out at $110 and $112/cwt.
Cattle futures edged lower amid light trade and uncertainty about the week’s cash direction.
Live Cattle futures closed an average of 38¢ lower.
Feeder Cattle futures closed an average of 62¢ lower (15¢ to $1.30 lower).
Boxed beef cutout values were lower on light to moderate demand and moderate offerings, according to the Agricultural Marketing Service.
Choice boxed beef cutout value was $1.02 lower in the afternoon at $223.90/cwt. Select was $1.09 lower at $202.30.
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Major U.S. financial indices closed lower Wednesday, under pressure from the notion that the Fed will increase interest rates two more times this year, rather than one, as previously expected. That’s after the widely anticipated hike in interest (+0.25%) Wednesday.
“Information received since the Federal Open Market Committee met in May indicates that the labor market has continued to strengthen and that economic activity has been rising at a solid rate,” according to a statement from the Fed. “Job gains have been strong, on average, in recent months, and the unemployment rate has declined. Recent data suggest that growth of household spending has picked up, while business fixed investment has continued to grow strongly. On a 12-month basis, both overall inflation and inflation for items other than food and energy have moved close to 2%. Indicators of longer-term inflation expectations are little changed, on balance.”
The Dow Jones Industrial Average closed 119 points lower. The S&P 500 closed 11 points lower. The NASDAQ was down 8 points.
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“The seasonality of heifer slaughter is likely changing as the herd size has recovered from the drought and expansion is slowing,” says David Anderson, Extension economist with Texas A&M AgriLife Extension Service.
In the most recent issue of In the Cattle Markets, Anderson explains, over the lasy several years, heifer slaughter tended to be seasonally low from about May-July, as herd expansion meant more heifer retention and fewer heading to the feedlot. Now, fewer heifers are being retained.
“Fed heifer slaughter is up about 17% over the last six weeks, using the daily slaughter data and estimating the first two weeks of June. Going back to the first of April, fed heifer slaughter is up about 16% compared to a year ago,” Anderson says. “Cattle slaughter surged over the last six weeks with weekly slaughter over 650,000 head every week since the first of May, except the Memorial Day- shortened week. Total cattle slaughter is up about 9% compared to the same period a year ago. Much of the year-over-year increase in slaughter is from heifers.” He adds that total weekly slaughter levels in May were the most for the month since May 2013.
Although there are more heifers on feed this year, Anderson says, “It is about the same as the number on feed, on average, over the 2007-2012 period before the drought and during the herd adjustments to ethanol-fueled feed costs.”