Although there were too few transactions for a full trend in any region, negotiated cash fed cattle trade got underway Wednesday with a decidedly bearish tone.
Live sales were $2-$3 lower in the Southern Plains at $125-$126/cwt.; $126-$127 in Nebraska. Live trade was $3 less in Colorado at $126; $1-$2 lower in the western Corn Belt at $128-$129. Dressed sales were $2-$3 lower at $206 in Nebraska and $205 in the western Corn Belt.
Early capitulation by some cattle feeders, and at those prices, surprised plenty of traders.
Live Cattle futures closed an average 87¢ lower through the front five contracts and then an average of 22¢ lower.
The notion is growing for some that last week was the seasonal top for fed cattle. If so, next comes a downward trek for prices through the summer months, with the pitch and speed depending on lots of factors; everything from marketing currentness associated with long-fed cattle and increasing cattle numbers, to beef demand, to feed prices impacted by protracted flooding to packer capacity utilization.
Feeder Cattle futures closed an average of 29¢ lower, except for an average of 8¢ higher for Aug-Oct. Trade was light.
Corn futures closed mostly 1¢ to 3¢ lower.
Soybean futures closed 10¢ to 13¢ lower through May ’20 and then 7¢ to 9¢ lower. Presumably, pressure is building with thoughts that weather will force more acres from corn to beans.
Wholesale beef values were weak on Choice and higher on Select with moderate to fairly good demand and moderate offerings, according to the Agricultural Marketing Service.
Choice boxed beef cutout value was 52¢ lower Wednesday afternoon at $228.99/cwt. Select was $1.54 higher at $220.53.
Major U.S. financial indices closed lower, Wednesday, giving back gains from the previous session. Once again, pressure included a decline in the 10-year Treasury yield and lingering worries about slowing global economic growth.
The Dow Jones Industrial Average closed 32 points lower. The S&P 500 closed 13 points lower. The NASDAQ was down 48 points.
Although devastating to individual producers and localities, cattle losses associated with the bomb cyclone are unlikely to impact overall short-term cattle markets, according to Don Close, senior protein analyst for Rabobank AgriFinance and Jim Robb, senior agricultural economist at the Livestock Marketing Information Center.
They were featured presenters at BEEF magazine’s Market Outlook webinar on Wednesday, which included perspective on markets for the remainder of this year and for 2020.
Longer term, they explained impacts could show up in this year’s calf crop, due both to direct loss and potential troubles settling cows this summer.
In the meantime, Robb noted that impact on crops, similar to 1993, could increase feed prices and pressures calf prices later in the year.