Negotiated cash fed cattle trade was slow on light demand in Kansas and Nebraska through Wednesday afternoon. Live trade was steady in Kansas at $114/cwt. and steady to $1 higher in Nebraska at $114.
Elsewhere, trade ranged from limited on light demand, to mostly inactive on very light demand, with too few transactions to trend, according to the Agricultural Marketing Service.
Last week, live prices were at $114/cwt. in the Southern Plains and Colorado 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 feeders sold near 1,000 head in Central Stockyards’ weekly Fed Cattle Exchange auction. Those selling—all from Texas except one lot from Nebraska—traded on a live weight basis at $114.50/cwt.
Cattle futures mostly edged higher Wednesday, supported by softer Corn futures after the front two contracts, as well as resurgent Choice wholesale beef values. Perhaps there was also some early positioning against the monthly Cattle on Feed report (see below).
Live Cattle futures closed an average of 52¢ higher, from 5¢ higher at the back to $1.22 higher in spot Apr.
Feeder Cattle futures closed an average of 39¢ higher (7¢ to $1.32 higher), except for 10¢ and 47¢ lower in the back two contracts.
Choice boxed beef cutout value was $1.54 higher Wednesday afternoon at $228.47/cwt. Select was $1.18 lower at $217.59.
Corn futures closed fractionally lower to 2¢ lower, except for 3¢ higher and fractionally higher in the front two contracts.
Soybean futures closed mostly 5¢ to 10¢ lower.
Major U.S. financial indices closed higher Wednesday, buoyed by reiteration from the Federal Reserve that it intends to maintain the dovish, accommodative stance toward interest rates.
“The Committee seeks to achieve maximum employment and inflation at the rate of 2% over the longer run. With inflation running persistently below this longer-run goal, the Committee will aim to achieve inflation moderately above 2% for some time so that inflation averages 2% over time and longer-term inflation expectations remain well anchored at 2%,” according to an FOMC statement. “The Committee expects to maintain an accommodative stance of monetary policy until these outcomes are achieved. The Committee decided to keep the target range for the federal funds rate at 0 to 0.25% and expects it will be appropriate to maintain this target range until labor market conditions have reached levels consistent with the Committee’s assessments of maximum employment and inflation has risen to 2% and is on track to moderately exceed 2% for some time.”
The Dow Jones Industrial Average closed 189 points higher. The S&P 500 closed 11 points higher. The NASDAQ was up 53 points.
Last month’s severe winter weather likely shifted some feedlot marketings.
“Because of the weather disruption, there is a temporal shift of expected steer and heifer marketings out of the first quarter to be marketed in the second quarter,” say analysts with USDA’s Economic Research Service (ERS), in the monthly Livestock, Dairy and Poultry Outlook.
Derrell Peel, Extension livestock marketing specialist at Oklahoma State University provides some perspective on how the widespread storm affected feedlot performance.
“Steer and heifer slaughter dropped 7.1% year over year in the middle two weeks of February before bouncing back. Steer carcass weights dropped sharply in February, declining by 20 lbs. from 919 lbs. to 899 lbs. in the last two weeks of the month,” Peel says, in is weekly market comments. “The last week of February marks the first time in 71 weeks (since October 2019) that weekly steer carcass weights were lower than the previous year. Heifer carcass weights dropped from 850 to 834 lbs. in the same period.”
That same storm closed sale barns, which may have limited feedlot placements for the month. On the other hand, current and expected wheat prices may elevate feedlot placements in March, as more producers with a dual-purpose winter wheat crop look to put it in the bin.
“…the expectation that relatively high wheat prices may discourage the grazing-out of small grains pastures and move more cattle into feedlots sooner than previously expected is anticipated to shift placements from the second quarter to the first quarter,” ERS analysts say. “As a result, some fed cattle marketings are expected to shift from the fourth quarter to the third quarter.”
USDA’s monthly Cattle on Feed report comes out Friday afternoon. Analysts surveyed by Urner Barry and reported by the Daily Livestock Report expect, on average, February feedlot placements to be 1.7% less than a year earlier, February marketings to be 2.6% less and the Mar. 1 inventory to be 1.5% more.