All things considered, Monday’s action in Cattle futures might be considered a victory of sorts, given the bearish placements in the latest Cattle on Feed report, although it tightens cattle supplies further down the line.
Feeder Cattle futures closed an average of 29¢ lower amid light trade.
Live Cattle futures closed an average of 44¢ lower.
Negotiated cash fed cattle trade was at a standstill in all cattle feeding regions through Monday afternoon, according to the Agricultural Marketing Service.
Live prices last week were at $138/cwt. in the Southern Plains and Nebraska and at $138-$142 in the western Corn Belt. Dressed prices were $221 in Nebraska and $221-$225 in the western Corn Belt.
The five-area direct average steer price was 15¢ lower at $138.95/cwt. The average steer price in the beef was 22¢ lower at $221.46.
Choice Boxed beef cutout value was $1.23 higher Monday afternoon at $263.87/cwt. Select was $4.18 higher at $256.32.
Grain futures softened Monday, led by wheat and soybeans, apparently with more optimism regarding a resolution to Russia’s war on Ukraine.
Soybean futures closed 16¢ to 46¢ lower.
Corn futures closed 2¢ to 5¢ lower through Jly ‘23 and then 3¢ lower to 3¢ higher.
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Major U.S. financial indices closed higher Monday, led. By tech stocks and perhaps emboldened by continued peace talks between Russia and Ukraine.
The Dow Jones Industrial Average closed 94 points higher. The S&P 500 closed 32 points higher. The NASDAQ was up 185 points.
West Texas Intermediate Crude Oil futures (CME) closed $5.50 to $7.94 lower in the front six contracts.
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“Feedlots will have plenty of cattle to market for another few months, but tighter placements are ahead and feedlot production will decline in the second half of the year, says Derrell Peel, Extension livestock marketing specialist at Oklahoma State University, in his weekly market comments. “If drought conditions persist, feedlots may perhaps continue to borrow against the future with early-weaned calves available through the spring and summer before facing the full reality of tighter feeder cattle supplies. On the other hand, if drought conditions abate, higher cattle prices might result in increased heifer retention by the end of the year, thereby squeezing feeder supplies even more and more quickly.”
Noting the 9.3% increase in February feedlot placements revealed in Friday’s Cattle on Feed report, Peel says the bulge will likely be offset by sharply lower placements in March.