Sharply lower Corn futures helped Cattle futures regain more lost ground on Tuesday.
Feeder Cattle futures closed an average of $2.94 higher.
Live Cattle futures closed an average of $1.20 higher.
Corn and Soybean futures weakened Tuesday, with pressure from the fast domestic planting pace and renewed hopes for renewal of the Black Sea Initiative. Corn received added pressure from China’s cancellation of sales of 272,000 metric tons.
Corn futures closed 9¢ to 14¢ lower through Jly ‘24, and then mostly 3¢ to 5¢ lower.
Soybean futures closed 13¢ to 18¢ lower through May ‘24 and then 9¢ to 11¢ lower.
KC HRW Wheat closed 1¢ to 15¢ higher through May ‘24 and then 1¢ to 5¢ lower.
Negotiated cash fed cattle trade ranged from mostly inactive on light demand to a standstill through Tuesday afternoon, with too few transactions to trend, according to the Agricultural Marketing Service.
Last week, live prices were $172/cwt. in the Southern Plains, $176-$178 in Nebraska and $172-$178 in the western Corn Belt. Dressed prices were $281 in Nebraska and $280-$285 in the western Corn Belt.
Choice boxed beef cutout value was $1.18 lower Tuesday afternoon at $307.38/cwt. Select was 23¢ lower at $284.89/cwt.
******************************
Major U.S. financial indices edged lower Tuesday as investors await key inflation data later this week and ponder the outcome of debt ceiling talks.
The Dow Jones Industrial Average closed 56 points lower. The S&P 500 closed 18 points lower. The NASDAQ was down 77 points.
West Texas Intermediate Crude Oil futures (CME) closed 55¢ to 62¢ higher through the front six contracts.
******************************
“Tightening beef supplies, underlying general strength in beef demand and seasonal grilling demand are all pushing wholesale beef prices higher,” says Derrell Peel, Extension livestock marketing specialist at Oklahoma State University, in his weekly market comments. “Consumer beef demand has continued to be remarkably resilient and wholesale beef prices are likely to go higher yet as beef production continues to decrease going forward.”
For perspective, Peel notes Choice boxed beef prices the first week of May averaged 309.41/cwt., which was 9% higher than the beginning of this year and 20% higher year over year. He explains prices so far this year are following a seasonal pattern — typically a peak in May ahead of grilling season before declining in the second half of the year.
“The May peak in boxed beef price is largely driven by retail grocery demand for Strip Loins and Sirloin cuts that move primarily through retail grocery channels. Chuck Roll prices are also very strong currently, which may be driven by export demand and retail grocery demand, including ground beef,” Peel says. “The most valuable cuts of Tenderloin and Ribeye are not typically seasonally strong this time of year, but both have been higher all year so far in 2023, reflecting continued strong restaurant demand.”
Peel adds ground beef demand typically increases during the summer due to grilling demand as well as increased consumer use of quick-service restaurants.
“The price of 90-percent lean trimmings (mostly cow beef) have been rising all year and are currently moving higher than year-ago levels,” Peel says. “More dramatically, the price of 50-percent lean trimmings has moved sharply higher to a current level that is unprecedented except for a brief spike during the pandemic in 2020.”