Cattle futures gave back some of the previous sessions gains on Wednesday amid likely profit taking and uncertainty about this week’s cash fed cattle direction.
Feeder Cattle futures closed an average of 91¢ lower except for 25¢ higher in the back contract.
Live Cattle futures closed an average of 42¢ lower except for 27¢ higher in the back contract.
Corn futures firmed Wednesday with likely short covering, while Wheat and Soybean futures eroded as traders position ahead of Friday’s World Agricultural Supply and Demand Estimates.
Corn futures closed mostly fractionally higher to 3¢ higher.
KC HRW Wheat closed mostly 1¢ to 10¢ lower.
Soybean futures closed 7¢ to 15¢ lower through Sep ‘23 and then mostly 1¢ to 3¢ lower.
Negotiated cash fed cattle trade was limited on light demand in all regions through Wednesday afternoon, according to the Agricultural Marketing Service. Although too few to trend, there were some early live sales in the Southern Plains at $170/cwt.
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 51¢ lower Wednesday afternoon at $306.87/cwt. Select was 35¢ lower at $284.54/cwt.
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Major U.S. financial indices closed mixed Wednesday as investors considered lower than expected inflation, but still high inflation.
The Consumer Price Index for All Urban Consumers (CPI-U) rose 0.4% in April on a seasonally adjusted
basis, according to the U.S. Bureau of Labor Statistics. Over the last 12 months, the all items index increased 4.9% before seasonal adjustment.
The Dow Jones Industrial Average closed 30 points lower. The S&P 500 closed 18 points higher. The NASDAQ was up 126 points.
West Texas Intermediate Crude Oil futures (CME) closed 95¢ to $1.15 lower through the front six contracts.
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Record high fed cattle prices and moderating input costs fueled gains in cattle feeding returns last month, according to the Livestock Information Center (LMIC).
“April cattle feeding returns calculated by LMIC soared over $300 per head in April as live steers in the five-area recorded record-breaking highs at mid-month. Live steer prices hit a new daily high of $182.86/cwt., more than $10 higher than the previous daily high of $172.08 recorded in late November 2014,” LMIC analysts say, in the most recent Livestock Monitor. “Nearly all of April recorded prices above that previous record. The monthly simple average calculated in Dodge City (price used in the LMIC calculation) for Choice fed steers was $173.43, equivalent to what feedlots were paying for 700-800-pound steers seven months prior. LMIC calculates a breakeven price at time of placement, which was estimated at $149.96/cwt.”
LMIC analysts note, April’s calculation is based off a feeder steer price that dipped $6 from the month before.
“Seasonally, fed cattle prices should be hitting a bottom, and with higher placements than the industry expected, this fall live cattle market may not be as tight as originally expected,” say LMIC analysts. “Still, cattle feeders are expected to have an excellent year, with no month currently projected to be negative in 2023. LMIC estimates the average returns for cattle feeders will be over $200 per head in 2023. Through April, cattle feeding returns have averaged $175 per head monthly.”