Negotiated cash fed cattle trade was mostly inactive on light demand through Friday afternoon, with too few transactions to trend in any region, according to the Agricultural Marketing Service.
For the week, live prices were $1 lower in the Southern Plains at $163/cwt., steady to $1 higher in Nebraska at $164-$165 and steady to $2 higher in the western Corn Belt at $164-$166. Dressed prices are $1 higher at $265.
Choice boxed beef cutout value was $2.90 lower Friday afternoon at $279.88/cwt. Select was 14¢ lower at $268.75/cwt.
Estimated total cattle slaughter last week was 626,000 head, which was 5,000 head fewer than the previous week and 31,000 head fewer than the same week last year. Total estimated year-to-date cattle slaughter of 7.5 million head was 202,000 head fewer (-2.6%) than the same period a year earlier. Total estimated year-to-date beef production of 6.2 billion pounds was 282.9 million pounds less (-4.3%).
Cattle futures were mixed as declining open interest continued.
Live Cattle futures closed an average of 53¢ higher (30¢ to 85¢ higher), except for 20¢ lower in away Jun.
Feeder Cattle futures closed an average of 76¢ lower (20¢ to $1.05 lower), except for 62¢ higher in spot Mar. Pressure included a surge in Corn Futures — 11¢ to 12¢ higher in old-crop contracts and then mostly 4¢ to 8¢ higher — lifted by flash export corn sales to China.
Chatter about Russia limiting wheat exports buoyed Kansas City Wheat futures, which closed 20¢ to 28¢ higher.
Soybean futures firmed but the overall outlook remains bearish with reports from South America that Brazil’s crop is expected to override any deficits in Argentina.
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Major U.S. financial indices closed higher Friday amid another volatile trading session as investors try to make sense of overall banking health.
The Dow Jones Industrial Average closed 132 points higher. The S&P 500 closed 22 points higher. The NASDAQ was up 36 points.
West Texas Intermediate Crude Oil futures (CME) closed 66¢ to 71¢ lower through the front six contracts.
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Although the Choice-Select spread continues to decline seasonally it remains higher year over year, as does the percentage of carcasses grading Choice and higher.
“The Choice-Select spread started the year on a high note of $27/cwt., a continuation of
the 2022 trends that capped off the year above $30,” say analysts with the Livestock Marketing Information Center (LMIC), in the latest Livestock Monitor. “Since the opening week of 2023, the Choice-Select spread has fallen almost every week and bottomed around $10/cwt. two weeks ago. The first quarter is only a few weeks shy of completion and the spread has averaged $15/cwt. over 11 weeks, even though the spread has been rapidly shrinking. Last year, the spread averaged just under $7/cwt., similar to the five-year average.”
LMIC analysts explain the spread is usually narrowest in the first quarter, widens through the second quarter before declining and then maintains a spread of approximately $15 through the last two quarters of the year. Last year, they say the spread followed the five-year average until June and then stayed at high levels through the remainder of the year with considerable volatility. From June through December last year, the average Choice-Select spread ranged between $20 and $32/cwt.
“Today’s spreads are still large for this time of year, but we are approaching the time of year where they should be widening. Starting at a higher base may give the summer peak in the spread more height,” according to LMIC analysts. “The feed cost structure and tightening cattle supplies may encourage shorter days on feed over the summer which may curb the availability of Choice product. This spring, the percent of beef grading Choice has been similar to 2022 and in recent weeks has been a higher proportion, topping 75%, compared to a five-year average of 73%.”