Cattle futures gained Tuesday with support from higher-trending wholesale beef prices and last week’s stronger cash trade.
Live Cattle futures closed an average of 64¢ higher.
Feeder Cattle futures closed an average of 92¢ higher (57¢ to $1.32 higher).
Negotiated cash fed cattle trade ranged from mostly inactive on light demand to a standstill through Tuesday afternoon, according to the Agricultural Marketing Service.
Last week, FOB live prices were $185-$186/cwt. Dressed delivered prices were $292-$300 in Nebraska and $292 in the western Corn Belt.
Choice boxed beef cutout value was $1.71 higher Tuesday afternoon at $310.79/cwt. Select was 72¢ higher at $299.60/cwt.
Corn futures closed unchanged to fractionally mixed.
KC HRW Wheat futures closed mostly fractionally lower.
Soybean futures closed mostly 13¢ to 17¢ higher, supported by lower estimated production in Brazil and a hotter forecast in South America.
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Major U.S. financial indices closed sharply higher Tuesday, led by tech stocks and despite a slightly hotter inflation reading than traders expected.
The Consumer Price Index for All Urban Consumers (CPI-U) increased 0.4% in February on a seasonally adjusted basis, after rising 0.3% in January, according to the U.S. Bureau of Labor Statistics. Over the last 12 months, the all items index increased 3.2% before seasonal adjustment.
The Dow Jones Industrial Average closed 235 points higher. The S&P 500 closed 57 points higher. The NASDAQ was up 246 points.
West Texas Intermediate Crude Oil futures (CME) closed 22¢ to 37¢ lower through the front six contracts.
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Lean beef trimming prices are on a tear, driving cull cow prices higher.
In this weekly market comments, Derrell Peel, Extension livestock marketing specialist at Oklahoma State University says 90% lean beef trimmings (90s) were $317.36/cwt. the first week of March, which was record high for data since 1978.
“The supply of non-fed beef (cow + bull) is down 12.7% year over year thus far in 2024, the result of a 13.1% year-to-date decrease in cow slaughter,” Peel says. “Dairy cow slaughter is down 15.0% and beef cow slaughter is down 11.4% year over year, while bull slaughter so far in 2024 is down 9.4% from one year ago.”
As domestic lean beef supplies decrease, and prices increase, Peel explains the market responds with increased U.S. beef imports — primarily lean beef trimmings — to moderate domestic prices.
“Accordingly, beef imports in 2023 increased 9.9% year over year. In the latest data for January, beef imports were up 38.1% year over year,” Peel says. “Beef imports are typically front-loaded in the new year as countries, especially Brazil, scramble to fill the unassigned ‘Other Country’ import quota. Monthly imports will moderate later in the year and total imports for 2024 are projected to increase 12-13% year over year.”