Negotiated cash fed cattle prices roared higher Wednesday with moderate trade and good demand in all regions. Live prices were $8-$10 higher than last week at $119-$120/cwt. Dressed sales were $15-$20 higher at $190.
Likewise, fed cattle prices were significantly higher in the weekly Fed Cattle Exchange auction Wednesday, with 1,614 head for current delivery (1-9 days) selling for a weighted average price of $119.77/cwt. Most of those were from the Southern Plains. Another 837 head sold for delivery at 1-17 days for a weighted average price of $117.73. There were 5,886 head offered.
Cattle futures, though, closed mixed but mostly lower on likely profit taking and squeamishness about what happens with beef demand after the initial flood of consumer stockpiling runs its course (see below).
Except for $2.30 higher in spot Apr, Live Cattle futures closed an average of $1.46 lower (87¢ to $2.52 lower).
Except for $1.85 higher in spot Mar and 5¢ higher in Aug, Feeder Cattle futures closed an average of $1.02 lower (40¢ to $1.60 lower).
Wholesale beef values were lower to sharply lower on light to moderate demand and offerings, according to the Agricultural Marketing Service.
Choice boxed beef cutout value was $1.01 lower Wednesday afternoon at $255.30/cwt. Select was $2.39 lower at $243.09.
Corn futures closed mostly 1¢ to 2¢ higher.
After 1¢ to 5¢ lower in the front three contracts, Soybean futures closed mostly 5¢ to 8¢ higher.
Major U.S. financial indices closed mixed Wednesday, higher on expectations the massive government economic stimulus package was close at hand, but soured by the fact that Congress was still at the wrestling stage.
The Dow Jones Industrial Average closed 495 points higher. The S&P 500 closed 28 points higher. The NASDAQ was down 33 points.
Although the recent surge in boxed beef prices could continue this week, as retailers restock shelves, Brenda Boetel, livestock economist at the University of Wisconsin—River Falls says, “There is no evidence that consumers are eating more beef currently, and as such the demand will likely decrease significantly once the supply system catches up with the rush demand of the last few weeks.”
Further, in the latest issue of In the Cattle Markets, Boetel explains significant long-term value comes from consumers eating high-quality beef cuts at restaurants. Restaurant traffic continues to lag, of course, in the wake of COVID-19.
“Luckily, the grilling season is right around the corner and that should help alleviate some of the expected drop in prices,” Boetel says.