Although too few to trend, there were a few early live sales in the Texas Panhandle on Monday at $95/cwt. There were a few dressed trades in Nebraska at $152-$155.
Cattle futures closed narrowly lower Monday.
Live Cattle futures closed an average of 22¢ lower.
Feeder Cattle futures closed an average of 55¢ lower, (7¢ lower at the back to 80¢ lower at the front).
Choice boxed beef cutout value was 34¢ higher Monday afternoon at $214.06/cwt. Select was 39¢ higher at $204.30.
Corn futures closed 3¢ to 4¢ lower in the front four contracts and then mostly 1¢ lower.
Soybean futures closed fractionally lower to 1¢ lower.
Major U.S. financial indices closed higher on Monday, buoyed by tech stocks.
The Dow Jones Industrial Average closed 153 points higher. The S&P 500 closed 20 points higher. The NASDAQ closed 110 points higher.
“Wholesale boxed beef prices have dropped nearly back to pre-COVID-19 levels and may go lower into mid-summer as abundant third-quarter beef production could highlight potential recessionary demand weakness,” says Derrell Peel, Extension livestock marketing specialist at Oklahoma State University.
In his weekly market comments, Peel explains cattle slaughter continues to recover from disruptions wrought by the pandemic, with estimated slaughter the week ending June 20 being 98.2% of year-earlier levels.
At the same time, the backlog of fed cattle continues to add days on feed and pounds per carcass.
Year to date, Peel notes steer and heifer carcass weights averaged 27.4 lbs. heavier year over year. Carcasses were an average of 20.4 lbs. heavier in the first quarter; 36.7 lbs. heavier for April 1 to June 6.
Beef production was 8.0% more year over year in the first quarter, while second-quarter production is estimated to be 14.0% less year over year, according to Peel. That makes for 3.8% less beef production for the year through June 19.
“The combination of recovered slaughter and higher carcass weights resulted in weekly beef production in mid-June estimated to be above year-earlier levels for the first time in 10 weeks,” Peel says. “Weekly beef production is likely to exceed year-earlier levels for the third quarter and perhaps for the balance of the year.”
More specifically, he explains third-quarter beef production is forecast to be nearly 6% higher than the same time last year. Annual beef production this year is forecast to be slightly more than last year at a record 27.3 billion lbs.
“With beef supplies increasing in the second half of the year, beef demand will be critical,” Peel says. “Retail grocery will transition from limited beef supplies in recent weeks to ample supplies at the same time that food service demand is slowly building.”