Cattle futures mostly maintained and extended gains from the previous session on Tuesday, buoyed by a breather in the Corn rally and higher outside markets.
Except for unchanged and 7¢ lower in the front two contracts, Live Cattle futures closed an average of 71¢ higher.
Feeder Cattle futures closed an average of 75¢ higher (32¢ up front to $1.27 higher at the back).
Wholesale beef values were weak to lower on light demand and moderate offerings, according to the Agricultural Marketing Service.
Choice boxed beef cutout value was $1.29 lower Tuesday afternoon at $220.53/cwt. Select was 71¢ lower at $201.80.
Corn futures closed mostly 4¢ to 6¢ lower through Sep ‘20 and then mostly fractionally mixed.
Soybean futures closed fractionally higher to 1¢ higher through Mar ‘20 and then fractionally lower to 1¢ lower.
Major U.S. financial indices closed sharply higher Tuesday, apparently based on speculation, more than anything. First, speculating that a China trade deal is within grasp as reports indicate President Trump is scheduled to meet with China’s leader ahead of the G20 Summit scheduled June 28-29. Next, speculation that the Fed will conclude its meeting Wednesday with either a rate cut or language signaling that they will ease rates sooner rather than later. Markets were also buoyed by reports that the European Central Bank stood ready to provide more economic stimulus in an effort to stimulate economic growth.
West Texas Intermediate Crude Oil futures on the CME also bounced higher on hopes of increased demand. Contracts for the remainder of this year closed $1.64-$1.97 higher.
The Dow Jones Industrial Average closed 353 points higher. The S&P 500 closed 28 points higher. The NASDAQ was up 108 points.
“It is a rare year in that corn prices are significantly higher while pasture conditions are in better shape than is usually expected this time of year,” says Josh Maples, Extension agricultural economist at Mississippi State University, in the latest issue of In the Cattle Markets. “This is likely to lead to shifts in how gain is added to feeders this year. Producers may glance at the lower prices offered and decide to push them a little longer on pasture. This could potentially lead to slower feedlot placements and temper 2019 beef production slightly.”
After year-to-year strength in April, Maples points out cash feeder cattle prices followed Feeder Cattle futures lower, due to a number of factors
“The usual peak in March or April is generally followed by a decline into the summer. Add in a bearish April Cattle on Feed report, weaker export totals, and the corn market rally, and there was not much good news for cattle markets in late April and May,” Maples explains. “Large supplies are still a major piece of the market puzzle, also. U.S. cattle slaughter for the first quarter of 2019 was about 1% above a year ago. However, lower cattle dressed weights have helped to moderate beef supplies.”