Cattle futures closed slightly lower Wednesday, basically in a holding pattern ahead of weekly cash fed cattle trade and Friday’s monthly Cattle on Feed report.
Live Cattle closed an average of 37¢ lower.
Feeder Cattle futures closed an average of 36¢ lower.
Negotiated cash fed cattle trade ranged from slow on light demand to a standstill through Wednesday afternoon, according to the Agricultural Marketing Service. Although, too few to trend, there were some early FOB live sales in Kansas at $186/cwt.
Last week, FOB live prices were $186/cwt. in the Southern Plains, $187-$188 in Nebraska and $187-$189 in the western Corn Belt. Dressed delivered prices were $295-$300 in Nebraska and $298 in the western Corn Belt.
Choice boxed beef cutout value was 22¢ higher Wednesday afternoon at $313.44/cwt. Select was 47¢ lower at $302.71/cwt.
Corn futures closed mostly 2¢ higher.
KC HRW Wheat futures closed mostly 1¢ to 3¢ lower.
Soybean futures closed 12¢ to 14¢ higher, tied in part of new-crop export announcements.
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Major U.S. financial indices closed higher Wednesday, with investor optimism tied to the Fed staying on course with interest rates and planned rate cuts as the year unfolds.
The Dow Jones Industrial Average closed 401 points higher. The S&P 500 closed 46 points higher. The NASDAQ was up 202 points.
West Texas Intermediate Crude Oil futures (CME) closed $1.02 to $1.79 lower through the front six contracts.
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Wholesale beef values remain firm with Choice at the highest price levels since last fall. Slower beef production and declining supplies are part of the equation, as is consumer beef demand.
“Choice boxed beef prices remain well over year-ago prices to the tune of $25/cwt., but remain well below the 2023 peak price of $343,” says Andrew P. Griffith, agricultural economist at the University of Tennessee, in his weekly market comments. “It is difficult to predict how high wholesale beef prices will go, given the overall price environment consumers are attempting to wade through with the elevated interest expense and higher overall prices of goods and services.”
On a related note, analysts with the Livestock Marketing Information Center (LMIC) note 90% lean beef was record high last week at $317/cwt., skyrocketing from $245 last December.
“The rally seen this winter is unparalleled by the previous cattle cycle. Fresh 90% lean beef prices have increased by a large magnitude and at a fast pace for this time of year, up 25% from the start of the year,” LMIC analysts explain in the latest Livestock Monitor. “In 2013 the same 10 week spread saw a 6% rise, in 2014 a 15% rise, and in 2015 a 2% decline. In 2014 fresh 90% lean beef prices continued to climb all year and eventually reached $278 in September, a 40% rise from the start of that year. Given that 2024 has increased so quickly, 90% lean prices may not be able to continue climbing at this pace. Put into context, a 40% increase from the start of 2024 would equal a 90% fresh lean price of just over $355 per cwt.”
Total U.S. cow slaughter is down 13% from last year through the first eight weeks of the year, according to LMIC. Beef cow slaughter is down 12%, while dairy cow slaughter is down 15%.