Stronger outside markets helped Cattle futures recover some recent losses Thursday.
Feeder Cattle futures closed an average of $1.63 higher.
Live Cattle futures closed an average of 39¢ higher, except for 2¢ lower in the back contract.
Weekly U.S. beef export sales also provided some support. Net U.S. beef export sales for the week ending March 9 were 17,700 metric tons (mt), according to USDA’s Export Sales report. That was noticeably higher than the previous week and 24% more than the previous four-week average.
Corn futures closed mostly 1¢ to 2¢ higher.
KC HRW Wheat closed mostly 1¢ to 2¢ lower.
Soybean futures closed mostly fractionally lower to 1¢ lower.
Negotiated cash fed cattle trade was limited on light demand in all regions through Thursday afternoon, according to the Agricultural Marketing Service.
So far this week, live prices are mainly $1 lower in the Southern Plains and Nebraska at $164/cwt., and $1-$2 lower in the western Corn Belt at $163-$165. Dressed prices are $1 lower at $264.
Choice boxed beef cutout value was 32¢ lower Thursday afternoon at $283.95/cwt. Select was 87¢ lower at $271.76/cwt.
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Major U.S. financial indices bounced back Thursday. Presumably, much of the support was due to First Republic Bank (FRB) — the fourteenth largest bank in the U.S. and apparently another one on the cash ropes — receiving $30 billion in uninsured deposits from some of the nation’s largest banks.
“Their collective support strengthens our liquidity position, reflects the ongoing quality of our business, and is a vote of confidence for First Republic and the entire U.S. banking system…” according to Jim Herbert, FRB executive chairman and Mike Roffler, FRB president and CEO, in a statement.
The Dow Jones Industrial Average closed 371 points higher. The S&P 500 closed 65 points higher. The NASDAQ was up 283 points.
West Texas Intermediate Crude Oil futures (CME) closed 74¢ to 84¢ higher through the front six contracts.
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With Choice boxed beef cutout value hovering around $285/cwt. and beef production declining, Andrew P. Griffith, agricultural economist at the University of Tennessee says, the question is how much resistance $300 will pose.
“The $250 price point has proven to be a strong support price, and it is difficult to believe Choice boxed beef will be rangebound between $250 and $300 per hundredweight,” Griffith explains in his weekly market comments. “The immediate thought is that Choice boxed beef has greater potential to exceed $300 than to decline below $250. This will primarily be supply-driven, compared to being demand-driven. The consumer has done about everything possible to demonstrate strong demand for beef. Thus, the declining quantity of beef available will be what pushes prices higher.”
For perspective, Griffith points out the market topped at just less than $350 on two occasions in 2021.
“This likely means it will be difficult to push past that mark in 2023. It is probably safer to assume the market will do well to challenge $325 in the next 12 months,” Griffith says.