Negotiated cash fed cattle trade ranged from moderate on moderate demand up north to a standstill through Friday afternoon, according to the Agricultural Marketing Service.
For the week, FOB live prices were $1 lower in the Southern Plains at $186/cwt., $2 lower in Nebraska at $190 and steady in the western Corn Belt at $190-$192. Dressed delivered prices in Nebraska were $3 lower at $301. Prices in the western Corn Belt the previous week were $302-$304.
Choice boxed beef cutout value was 84¢ lower Friday afternoon at $313.20/cwt. Select was 81¢ lower at $301.71/cwt. Choice was $2.75 higher week to week on Friday. Select was 1¢ lower.
Estimated total cattle slaughter for the holiday-shortened week of 540,000 head was 67,000 head fewer than the previous week and 28,000 head fewer than the same week a year earlier. Year-to-date estimated total cattle slaughter of 13.1 million head was 624,000 fewer (-4.5%) than the same time last year. Estimated year-to-date beef production of 11.1 billion pounds was 218.4 million pounds less (-1.9%).
Cattle futures continued lower Friday with pressure including steady to lower cash fed cattle prices.
Live Cattle futures closed an average of $1.16 lower. They were an average of $2.70 lower week to week on Friday.
Feeder Cattle futures closed an average of $2.04 lower, from 87¢ lower at the back to $2.67 lower at the front. Week to week, they were an average of $2.57 lower, from $1.15 lower toward the back to $3.82 lower at the front.
Grain futures continued to erode on Friday.
Corn futures closed 3¢ to 4¢ lower. Through the front six contracts, they were an average of 20¢ lower week to week.
KC HRW Wheat futures closed mostly fractionally mixed.
Soybean futures closed 3¢ to 5¢ lower.
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Major U.S. financial indices closed mixed Friday. Much of the support seemed tied to the latest Personal Consumption Expenditures Price Index —a closely watched inflation gauge — coming in near expectations.
The Dow Jones Industrial Average closed 574 points higher. The S&P 500 closed 42 points higher. The NASDAQ was down 2 points.
West Texas Intermediate Crude Oil futures on the CME were 54¢ to 92¢ lower through the front six contracts.
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Assuming no price risk management, cattle feeding returns are projected to be negative from June to the end of this year, according to the most recent Historical and Projected Kansas Feedlot Net Returns (KFNR) from Kansas State University.
For June through December, projected net returns for steers range from -$47.99 per head in July to -$259.78 in September with feedlot cost of gain ranging between $109.91/cwt (June) to $116.34 (Dec.).
Similarly, projected net returns for fed heifers during the same period range from -$2.74 per head in July to -$176.38 in Sept. with feedlot cost of gain ranging from $119.20/cwt. (June) to $127.79 (Dec.).
Based on the KFNR, analysts with the Livestock Marketing Information Center (LMIC) say, “The number of days on feed for a steer was reported at 206 days in April, which is up 25 days from 181 days in January. A year ago in April, the number of days on feed for a steer was 190. The number of days on feed for heifers increased from 178 days in January to 191 days in May, compared to 170 to 186 days during the same period last year.”
LMIC analysts add the increased number of days on feed and a decrease in average daily gain since the start of the year have resulted in more pounds of feed per pound of gain.
“Year-to-date through April, the pounds of feed per pound of gain for steers has averaged 6.8 compared to 6.4 last year while heifers have averaged 7.2 versus 6.8 last year, LMIC analysts explain,” in the latest Livestock Monitor. “Although pounds of feed per pound of gain have increased this year, feed costs have averaged $125 and $133/cwt. respectively, for steers and heifers, a decline of 15% and 16% compared to last year.”
For ADG perspective, LMIC analysts say it is less year over year and less than the five-year average through the first four months of this year. For steers, they explain steer ADG declined to 3.14 lbs. in April from 3.41 lbs. in January. For heifers, ADG declined from 3.03 lbs. in January to 2.89 pounds in April.