Feeder Cattle futures rallied back Monday, closing an average of $1.63 higher (65¢ higher at the back to $2.20 higher). They recovered the previous session’s losses, helped along by lower Corn futures and carried Live Cattle along.
Live Cattle futures an average of an average of 47¢ higher, also helped by higher wholesale values.
Choice Boxed beef cutout value was $3.70 higher Monday afternoon at $268.68/cwt. Select was 22¢ higher at $245.24.
Corn futures closed 18¢ to 20¢ lower through new-crop contracts on the positive weather outlook.
Higher crude oil and vegetable oil prices helped boost Soybean futures mostly 5¢ to 8¢ higher through Jly ‘23
Negotiated cash fed cattle trade ranged from mostly inactive on very light demand to a standstill through Monday afternoon, according to the Agricultural Marketing Service.
Last week, live prices were $137-$138/cwt. in the Southern Plains, $145-$148 in the Northern Plains and $145-$150 in the western Corn Belt. Dressed prices were $234-$240.
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Major U.S. financial indices closed lower Monday as investors appeared to await further direction from weekly data before taking the recent rally another step.
The Dow Jones Industrial Average closed 62 points lower. The S&P 500 closed 11 points lower. The NASDAQ was down 83 points.
West Texas Intermediate Crude Oil futures on the CME closed $1.51 to $1.95 higher through the front six contracts.
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Given another month of record-large on-feed numbers, Derrell Peel, Extension livestock marketing specialist at Oklahoma State University says, “It is reasonable to ponder why feedlots have maintained record inventories this year despite declining cattle numbers since 2019.
In his weekly market comments, he explains, generally speaking, expectations would have pegged peak feeder supplies in 2019 and peak feedlot production in 2020.
Then came delays due to the pandemic, less heifer retention —more heifers directed to the feedlot — stemming from cyclical herd contraction and then drought. Likewise, placement weights in recent months suggest feedlots have been pulling available supplies forward.
“It will take much of the remainder of the year for feedlots to work through the current inventory and we can’t be sure what additional impacts the drought may have in the coming months,” Peel says. He explains, we may continue to see feedlot placements pulled ahead and more heifers shifted into feedlots for a period, but it is inevitable that cattle supplies will tighten significantly in the coming months and feedlot inventories will fall. The longer it takes to see that process begin, he says the more sudden and dramatic it will be. Although the timing is always tricky, Peel says the latest placement data may indicate that process has begun.