Cattle futures continued higher Monday, helped along by surging wholesale beef prices and softer Corn futures.
Live Cattle futures closed an average of 47¢ higher.
Feeder Cattle futures closed an average of 68¢ higher.
Corn futures softened a touch Monday, following the previous session’s strong gains, perhaps pressured in part by rain forecast in the Corn Belt.
Corn futures closed mostly 2¢ to 4¢ lower.
KC HRW Wheat closed 4¢ to 10¢ higher.
Soybean futures closed mostly 2¢ to 5¢ lower.
Negotiated cash fed cattle trade was at a standstill in all major cattle feeding regions through Monday afternoon, according to the Agricultural Marketing Service.
Last week, live prices were $175-$180/cwt. in the Texas Panhandle, $178-$180 in Kansas, $183-$189 in Nebraska and $185-$187 in the western Corn Belt. Dressed prices were $285-$292 in Nebraska and $288-$292 in the western Corn Belt.
Choice boxed beef cutout value was $4.26 higher Monday afternoon at $314.19/cwt. Select was $5.80 higher at $296.73/cwt.
Major U.S. financial indices closed lower Monday, with likely profit taking from last week’s strong gains.
The Dow Jones Industrial Average closed 199 points lower. The S&P 500 closed 8 points lower. The NASDAQ was down 11 points.
West Texas Intermediate Crude Oil futures (CME) closed 28¢ to 42¢ higher through the front six contracts.
Dwindling beef production and resilient wholesale beef demand are lifting cattle prices.
“Tighter supplies of beef and cattle are dominating market fundamentals and will continue to do so,” explains Derrell Peel, Extension livestock marketing specialist at Oklahoma State University, in his weekly market comments.
Peel points out beef production was 4.8% less year over year for the first 20 weeks of this year, with lighter year-over-year carcass weights magnifying the decline.
“Choice boxed beef prices finished last week at $309.93/cwt., up $6/cwt. from the Friday before Memorial Day,” Peel notes. “Boxed beef prices previously peaked in late April but decreased through May with holiday buying completed. The increase in Choice boxed beef prices into June suggests that post-Memorial Day beef demand remains strong.”
As cattle slaughter declines, harvest remains weighted toward a higher percentage of females than is typical.
“Total cattle slaughter is down 2.8% so far this year compared to last year, with fed slaughter down 2.4% and total cow slaughter down 4.1% year over year,” Peel says. “However, heifer slaughter remains 0.6% higher year over year for the year to date and total female (heifer plus cow) so far this year accounts for 52.4% of total cattle slaughter.”
Increasing fed cattle, calf and feeder cattle prices are providing economic incentive for herd expansion, and it appears Mother Nature is beginning to cooperate.
“Recent improvement in drought conditions increases the odds that heifer retention will begin in earnest in the second half of the year,” Peel says. “Increased heifer retention, combined with reduced cow culling will increasingly squeeze cattle slaughter for the remainder of the year and into 2024 and beyond.”