Cattle futures extended losses from the previous session on Monday, and for the same reasons: long-position liquidation by funds tied to growing uncertainty tied to looming U.S. tariffs and concerns about domestic economic growth.
Toward the close, Live Cattle futures were an average of 71¢ lower. Feeder Cattle futures were an average of 74¢lower.
Negotiated cash fed cattle trade was mostly inactive on very light demand in all regions through Monday afternoon, according to the Agricultural Marketing Service.
Last week, FOB live prices were $2 lower in the Southern Plains at $197/cwt., $1-$2 lower in Nebraska at $198 and $1-$3 lower in the western Corn Belt at $198. Dressed delivered prices were $2 lower at $313.
The five-area direct weighted average FOB live steer price last week was $1.99 lower at $197.65. The weighted averaged dressed delivered steer price was $2.20 lower at $312.92.
Choice boxed beef cutout value was $2.10 higher Monday afternoon at $313.93/cwt. Select was 36¢ higher at $302.41.
Grain and Soybean futures continued to unwind Monday with the looming threat of U.S. tariffs.
Toward the close and through Sep ’25 contracts, Corn futures were 5¢ to 13¢ lower. Kansas City Wheat futures were 9¢ to 11¢ lower. Soybean futures were 12¢ to 15¢ lower.
******************************
Major U.S. financial indices closed sharply lower Tuesday with U.S. tariffs on Mexico and Canada slated to begin Tuesday.
The Dow Jones Industrial Average closed 649 points lower. The S&P 500 closed 104 points lower. The NASDAQ was down 497 points.
West Texas Intermediate Crude Oil futures on the CME were $1.11 to $1.46 lower through the front six contracts.
******************************
Contracting cattle supplies pushing feeder cattle prices higher — with value increasing faster at lighter weights — clouds stocker and backgrounding opportunity, according to Derrell Peel, Extension livestock marketing specialist at Oklahoma State University.
“The current market is characterized by tight feeder cattle supplies and relatively low feedlot cost of gain. The role of the stocker industry gets squeezed in this environment,” Peel explains in his weekly market comments. “On the one hand, high calf prices are encouraging herd rebuilding and increased calf production. In other words, the market is indicating that the highest and best use of forage is for calf production rather than forage-based stocker production. On the other hand, low feedlot cost of gain and tight feeder supplies are encouraging feedlots to place animals sooner and at lighter weights, effectively bidding them away from stocker production.”
Peel notes both influences are reflected by the wide price in feeder cattle prices, from light to heavy, which equate to a large price rollback and relatively low value of gain for stocker production.
“Stocker production will still occur, but the opportunities will be fewer and the margins will be trickier,” Peel says. “However, when heifer retention begins, feeder supplies will be further squeezed from a feedlot perspective, but many of those heifers will need a growing phase as part of their development for breeding and thus provide a stocker role.”