Cattle futures closed lower on Friday amid weaker cash fed cattle prices but ended mostly higher week to week.
Negotiated cash fed cattle trade ranged from slow on light to moderate demand in the Southern Plains through Friday afternoon, according to the Agricultural Marketing Service. Live prices were $173/cwt., which was $2 lower in the Texas Panhandle and steady to $2 lower in Kansas.
Elsewhere, trade ranged from mostly inactive on light demand to limited on light demand.
For the week, live prices were $2-$7 lower in Nebraska at $178 and steady to $3 lower in the western Corn Belt at $180. Dressed prices were $1-$4 lower in Nebraska at $283-$286 and $3 lower in the western Corn Belt at $285.
Choice boxed beef cutout value was 37¢ higher Friday afternoon at $311.44/cwt. Select was 75¢ lower at $288.34/cwt.
Estimated total cattle slaughter last week of 620,000 head was 2,000 head less than the prior week and 25,000 head fewer than the same week last year. Year-to-date estimated cattle slaughter of 10.6 million head was 352,000 head fewer (-3.2%) than the same time last year. Estimated year-to-date beef production of 8.75 billion pounds was 444.8 million pounds (-4.8%) less than a year earlier.
Live Cattle futures closed an average of 11¢ lower, except for 27¢ higher in near Jun and unchanged in Dec. Week to week on Friday, they closed an average of 61¢ higher, except for unchanged to 37¢ lower in three contracts. Funds extended already weighty long positions, according to the weekly CFTC Commitments of Traders report.
Feeder Cattle futures closed an average of 60¢ lower on Friday, except for 20¢ higher in the back contract. Week to week they closed an average of $1.13 higher, except for $1.42 lower in spot May.
Perhaps the main market story last week was price erosion in the grain complex as China cancelled U.S. corn purchases and managed money fled positions as the nation’s price competitiveness declines.
Corn futures closed mostly 2¢ lower in new-crop contracts on Friday. Week to week, they were an average of 22’0¢ lower through the front six contracts, except for 2’8¢ higher in spot May.
KC HRW Wheat closed 8¢ to 11¢ higher, except for 28’4¢ higher in the front month.
Soybean futures closed mostly 7¢ to 8¢ higher, except for 11¢ to 17¢ higher in the front three contracts. Week to week on Friday, they closed from an average of 24’8¢ lower through the front six contracts, except for 5’8¢ lower in spot May.
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Major U.S. financial indices closed higher Friday with follow-through support and positive quarterly corporate earnings reports.
The Dow Jones Industrial Average closed 272 points higher. The S&P 500 closed 34 points higher. The NASDAQ was up 84 points.
West Texas Intermediate Crude Oil futures (CME) closed $1.88 to $2.03 higher through the front six contracts.
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Although the previous Friday’s monthly Cattle on Feed report added pressure in cattle futures early last week, they ended mostly higher week to week with bullish supply fundamentals and price erosion in the grain complex.
As mentioned in Cattle Current last week, March feedlot placements (feedlots with 1,000 head or more capacity) were 4.2% more than analysts expected, although 0.6% less year over year.
Kenny Burdine, Extension livestock Economist at the University of Kentucky expects more placements than anticipated had more to do with timing than a major shift in market fundamentals.
In Cattle Market Notes Weekly, Burdine offers some possible reasons for the higher placement numbers than anticipated.
“First, March is a month when cattle are often moved off of wheat pasture. Continued dry weather in much of the Southern Plains, combined with high wheat prices, likely impacted movement of feeders last month,” Burdine says. “Secondly, live cattle imports from Mexico were higher in March, which would contribute to placement numbers. And finally, there is still a lot of carry on the feeder cattle board, so it is very possible that feedlots are aggressively buying feeders ahead, in anticipation of the rising price levels suggested by deferred feeder cattle futures contracts.”