Whether it was oversold conditions or grass fever, Cattle futures found firm traction amid active trade to start the week.
Feeder Cattle futures closed an average of $2.80 higher ($2.42 to $3.82 higher).
Live Cattle futures closed an average of $1.89 higher ($1.45 to $2.27 higher).
Negotiated cash fed cattle trade was at a standstill in all regions through Monday afternoon, according to the Agricultural Marketing Service.
Last 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 were $1 higher at $265.
The five-area direct weighted average fed steer price last week was 17¢ higher on a live basis at $164.41/cwt. The average fed steer price in the beef was $1.24 higher at $265.06.
Choice boxed beef cutout value was 48¢ higher Monday afternoon at $280.36/cwt. Select was 97¢ higher at $269.72/cwt.
Grain and Soybeans futures continued higher Monday with less skittish outside markets and perhaps some early positioning ahead of Friday’s stocks and planting intentions reports.
Corn futures closed 5¢ to 9¢ higher through Jly ‘24 and then mostly 1¢ to 2¢ higher.
KC HRW Wheat closed 11¢ to 13¢ higher.
Soybean futures closed mostly 12¢ to 15¢ higher.
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Major U.S. financial indices closed with a firmer feel Monday, buoyed by recently beleaguered and volatile regional bank stocks.
The Dow Jones Industrial Average closed 194 points higher. The S&P 500 closed 6 points higher. The NASDAQ was down 55 points.
Geopolitical tensions and more positive outside markets helped lift Crude Oil futures Monday. Texas Intermediate Crude Oil futures (CME) closed $3.30 to $3.55 higher through the front six contracts.
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Beef production the last four weeks averaged 6.4% less year over year, stemming from fewer cattle slaughtered and lighter carcass weights, according to Derrell Peel, Extension livestock marketing specialist at Oklahoma State University, in his weekly market comments.
“Steer slaughter is down 5.3% year over year in the last month and steer carcass weights have averaged 903 pounds, down 16 pounds from one year ago. Heifer slaughter has finally begun to decrease and is down 1.6% in the past month, with heifer carcass weights at 830 pounds, down 20 pounds year over year,” Peel says. “Cow slaughter is down 6.8% year over year in the last four weeks, including a 0.9% increase in dairy cow slaughter and a 13.6% year over year decrease in beef cow slaughter. Cow carcass weights have averaged 646 pounds the last month, 11 pounds lower than the same period last year. Bull slaughter is down 14.6% from one year ago. Bull carcass weights have averaged 854 pounds in the last four weeks, down 26 pounds compared to one year ago.”
Amid declining production and resilient beef demand, Peel explains Choice boxed beef cutout value over the last month averaged $258.13/cwt., which was 11% more year over year.
“Beef production is expected to drop more sharply for the remainder of the year, adding even more supply pressure to support prices,” Peel explains. “Current estimates for 2023 have beef production decreasing in a range from 4.5% to 6.0% lower year over year. The decrease will depend, in part on whether continued drought causes additional herd liquidation and temporarily moderates declining beef production and resulting in a smaller decrease.”
You can find more of Peel’s market insights here.