Cattle movement was stymied across a broad section of the country on Thursday, courtesy of blizzard conditions and flooding.
Negotiated cash fed cattle trade continued to trickle along at mostly $127 on a live basis in Nebraska.
Cattle futures gained, with support from the continued rally in Lean Hog futures and likely near-term support from the latest round of winter.
Live Cattle futures closed an average 84¢ higher through the front four contracts and then an average of 41¢ higher.
Except for 45¢ lower in spot Mar, Feeder Cattle futures closed an average of 60¢ higher.
Corn futures closed 1¢ to 4¢ higher through Mar ’20 and then mostly fractionally mixed.
Soybean futures closed 2¢ to 3¢ lower through Nov ’20 and then fractionally lower.
Wholesale beef values were weak on light to moderate demand and moderate offerings, according to the Agricultural Marketing Service.
Choice boxed beef cutout value was 54¢ lower Thursday afternoon at $227.70/cwt. Select was 52¢ lower at $218.76.
Major U.S. financial indices closed mixed but little changed Thursday. Pressure included weaker new home sales than expected.
Sales of new single-family houses in January 2019 were at a seasonally adjusted annual rate of 607,000, according to estimates released jointly by the U.S. Census Bureau and the Department of Housing and Urban Development. That was 6.9% below the revised December rate and 4.1% less than the January 2018 estimate.
The Dow Jones Industrial Average closed 7 points higher. The S&P 500 closed 2 points lower. The NASDAQ was down 12 points.
“The number of fed cattle marketed in 2019 is anticipated to be lower than in 2018 as feedlots continue to slow the pace of marketings,” say analysts with USDA’s Economic Research Service (ERS), in the monthly Livestock, Dairy and Poultry Outlook. “Since the February Outlook report, fed cattle prices have continued their seasonal trend upward; prices typically peak in the spring. This reflects a period when fewer fed cattle are slaughtered, carcass weights are lighter, and demand picks up in anticipation of the grilling season. The current pace of slaughter combined with lower carcass weights could help support higher boxed-beef prices.” Based on current price data and expected lower marketings and lighter carcass weights this year, those analysts note the fed steer price forecast was raised to $116-$123/cwt.
Likewise, USDA bumped up their expectation for feeder steer prices to $141-$149, with a midpoint price of $145/cwt.
Although noting the 1% year-to-year increase in cattle outside feedlots Jan. 1, ERS analysts explain, “With continued large supplies of cattle in feedlots and a slower expected pace of placements in early 2019, feeder steer prices in first-half 2019 were little changed, but prices in second-half 2019 were raised as calf supplies are expected to be tighter.”