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 at $114/cwt. in the Southern Plains and Colorado, $113-$114 in Nebraska and $112-$113 in the western Corn Belt. Dressed prices were at $180 in Nebraska and at $178-$180 in the western Corn Belt.
Cattle futures closed higher Monday with Live Cattle supported by growing open interest in the previous session, as well as decent cash trade volume last week.
Live Cattle futures closed an average of 76¢ higher (12¢ to $1.35 higher).
Feeder Cattle futures closed an average of 83¢ higher (32¢ to $1.35 higher).
Choice boxed beef cutout value was $1.10 lower Monday afternoon at $224.77/cwt. Select was $2.22 lower at $218.05.
Corn futures closed 2¢ to 10¢ higher through the front three contracts and then mostly 1¢ lower.
Soybean futures closed 3¢ to 7¢ higher through the front four contracts, then mostly unchanged to fractionally lower.
Major U.S. financial indices closed higher Monday, buoyed by optimism about the pace of COVID-19 vaccines as it relates to fully reopening the economy.
The Dow Jones Industrial Average closed 174 points higher. The S&P 500 closed 25 points higher. The NASDAQ was up 139 points.
“Live steer prices in the five-area marketing region are nearly flat since the first week of February, hovering around $114/cwt., despite a strong rally in the comprehensive cutout to near-record levels for the month of February,” explain analysts with USDA’s Economic Research Service (ERS), in the latest monthly Livestock, Dairy and Poultry Outlook. “An abundant supply of fed cattle on feed over 150 days Feb. 1 that is greater than the same time last year, along with the inability to process a portion of those cattle due to the winter storm system in February, likely did not support higher prices in line with typical seasonal patterns.”
Although fed cattle prices languish, Derrell Peel, Extension livestock marketing specialist at Oklahoma State University notes the premium for June Live Cattle, compared to April, suggests optimism ahead.
“After the fed cattle market works through ample cattle supplies in the first half of the year, beef production is expected to decrease year over year in the second half of the year. Live Cattle futures for the fall suggest higher fed cattle prices in the last half of the year,” Peel says, in his weekly market comments.
Similarly, Peel points to the premium for fall Feeder Cattle futures, compared to nearby contracts, explaining that summer stocker prospects are promising at this point in time.
“Feeder steer prices for February 2021 averaged $131.82/cwt. for steers weighing 750-800 lbs., sold at Oklahoma National Stockyards, just over $6 above a year ago,” say ERS analysts. “However, prices for the first two weeks of March are almost $8 above the same month last year.”
ERS increased the expected first-quarter average for feeder steers by $1 to $133/cwt. Price projections were unchanged for the remainder of the year: $134 in the second quarter; $139 in the third quarter; $140 in the fourth quarter; $136.50 for the 2021 average.