Corn futures surged 11¢ to 15¢ higher through Jly ‘23 on Monday, tied to increased uncertainty stemming from Russia’s weekend destruction of a major grain export terminal in the southern part of Ukraine.
That helped pressure Feeder Cattle futures an average of $1.32 lower (85¢ lower at the back to $1.90 lower in spot Aug).
Live Cattle futures closed an average of 57¢ lower, except for 22¢ higher in the back contract.
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 $2 lower in the Southern Plains at $135/cwt. and steady to $1 lower at $139-$140 in Nebraska and $140-$141 in the western Corn Belt. Dressed prices were $1-$2 lower in Nebraska at $222 and steady to $5 lower in the western Corn Belt at $222.
The five-area weighted average direct fed steer price last week was $1 lower on a live basis at $138.07/cwt. The average steer price in the beef was $2.10 lower at $221.89.
Choice Boxed beef cutout value was $2.32 higher through Monday afternoon at $269.58/cwt. Select was $1.07 higher at $251.09.
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Major U.S. financial indices closed little changed but to the upside Monday.
The Dow Jones Industrial Average closed 16 points higher. The S&P 500 closed 12 points higher. The NASDAQ was up 48 points.
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Calf prices declined more than seasonally expected this spring, says Derrell Peel, Extension livestock marketing specialist at Oklahoma State University. He explains high grain prices and poor forage prospects helped push the price for a 500 lb. steer in Oklahoma City about 12% lower from the first of April to the end of May, compared to the typical decline of 4-5%.
Feeder-weight cattle (800 lbs., Oklahoma City) prices were less impacted, about 4% lower from early April to late May, compared to a usual seasonal decline of 1-2%.
“Increasing feedlot ration costs continue to push down on feeder cattle prices,” Peel says. “However, Feeder Cattle futures have rallied off the mid-May lows as Corn futures have moderated. If it persists, this may help stabilize cash feeder cattle prices into the summer.”
Similarly, Peel says fed cattle prices decreased along seasonal expectations during the past month.
“Fed prices typically decrease into the summer as fed slaughter reaches a seasonal peak between May and August. Fed prices typically reach a summer low around Labor Day, before increasing in the fourth quarter,” Peel explains.