Softer feed futures prices, late-week firmness in cash trade and higher outside markets helped support Cattle futures Friday.
Corn futures closed 2¢ to 12¢ lower in old-crop contracts and then mostly 1¢ lower to 1¢ higher.
Soybean futures closed fractionally lower to 3¢ lower through Jan ’23 and then mostly 11¢ to 13¢ higher.
Feeder Cattle futures closed an average of $1.25 higher (45¢ higher in spot Mar to $1.57 higher).
Live Cattle futures closed an average of 66¢ higher, from 35¢ to $1.15 higher.
Negotiated cash fed cattle trade ranged from slow on light demand to mostly inactive on light demand with too few transactions to trend in any region, according to the Agricultural Marketing Service.
Live prices last week were steady in the Southern Plains and Nebraska at $138/cwt. They were steady to $2 higher in the western Corn Belt at $140. Dressed prices were $1 higher in Nebraska at $221 and steady to $3 higher in the western Corn Belt at $222.
Estimated total cattle slaughter last week of 644,000 head was the same as a week earlier but 15,000 head more than the same week last year. Total estimated year-to-date cattle slaughter of 7.1 million head is just 2,000 head fewer than the same time last year. Total estimated year-to-date beef production is 13.3 million lbs. more at 5.96 billion lbs.
The seasonal turn in wholesale beef prices was also supportive.
Choice Boxed beef cutout value was $1.11 higher Friday afternoon at $258.16/cwt. Select was 3¢ lower at $250.65.
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Major U.S. financial indices continued to scale higher Friday, extending the mid-week relief rally, as investors apparently grew more comfortable with the Fed trajectory for interest rates, as well as potential fallout from Russia’s attack on Ukraine.
The Dow Jones Industrial Average closed 274 points higher. The S&P 500 closed 51 points higher. The NASDAQ was up 279 points.
West Texas Intermediate Crude Oil futures on the CME closed $1.21 to $1.72 higher in the front six contracts.
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Elevated prices for beef middle meats and Australia’s shift to more grain-fed production could further underpin slaughter bull and slaughter cow prices going forward, says Andrew P. Griffith, agricultural economist at the University of Tennessee, in his weekly market comments.
“Higher beef prices will certainly result in some consumers reducing the quantity of steaks purchased and increase the quantity of ground beef purchased,” Griffith explains. “The shift in Australia production to include more grain-finished beef will likely reduce the supply of lean grinding beef, which is a commodity commonly imported by the United States. A reduction in this supply will increase the price of imports that in turn should increase the price of grinding beef from cows. Not to be undersold, it should also increase the value of 50-50 trimmings from finished cattle.”
Currently, Griffith notes slaughter cow and slaughter bull prices increased $8/cwt., from January to February and are likely to be another $4-$6 higher by the end of March.
“The increase in March will not likely be the end of such increases as the seasonal tendency is for slaughter cow and bull prices to continue increasing through June,” Griffith says.
As noted in the previous issue of Cattle Current beef prices and high inflation appear to be shifting some consumer buying decisions.
“There is some evidence of consumers shifting purchases to more ground beef and fewer steaks in response to high retail prices. There is also evidence of some shifting to less expensive Select beef cuts and away from higher priced Choice and Prime,” explains David Anderson, Extension livestock economist at Texas A&M University, in the latest issue of In the Cattle Markets from the Livestock marketing Information Center.
For perspective, Anderson says, “Both the cow beef cutout and wholesale 90% lean beef for ground beef are well above a year ago, at $229 and $284/cwt., respectively. Wholesale middle meat prices have dropped in recent weeks. For example, both wholesale ribeye and strip loin prices have fallen below year-ago levels.”