Negotiated cash fed cattle trade was limited on light to moderate demand in Nebraska and the western Corn Belt through Tuesday afternoon, according to the Agricultural Marketing Service.
Although too few transactions to trend, there were a few dressed trades in Nebraska at $191/cwt., which was $1-$3 higher than last week; a few lives trades in the western Corn Belt at $120, which was $1-$3 higher. Elsewhere, trade was mostly inactive on light demand or at a standstill.
Cattle futures maintained gains from the previous session, supported by the outlook for higher cash prices and continued wholesale strength.
Live Cattle futures closed an average of $1.14 higher (40¢ to $1.70 higher).
Feeder Cattle futures closed an average of 25¢ higher, except for 12¢ lower in spot May.
Choice boxed beef cutout value was $3.26 higher Tuesday afternoon at $312.37/cwt. Select was $2.58 higher at $296.34
Grain futures recovered from sharp losses the previous day to surge ahead again in the front months, with likely profit taking and positioning ahead of Wednesday’s monthly World Agricultural Supply and Demand Estimates.
Corn futures closed 10¢ to 11¢ higher in the front two contracts, and then mostly 2¢ to 5¢ higher.
Soybean futures closed 16¢ to 27¢ higher through Jan ‘22, then mostly 4¢ to 11¢ higher.
Major U.S. financial indices closed lower Tuesday as ongoing supply chain disruptions and reports of labor shortages fueled inflation worries.
The Dow Jones Industrial Average closed 473 points lower. The S&P 500 closed 36 points lower. The NASDAQ was down 12 points.
“Weekly cattle slaughter has been averaging near 650,000 head per week, except for the first week in January and the winter storm in February. This is near post-pandemic weekly slaughter highs, which signal that COVID-related changes in processing facilities are limiting slaughter levels,” say analysts with the Livestock Marketing Information Center (LMIC), in the May 7 Livestock Monitor. “The capacity-limited flow of cattle has limited upside potential for cattle prices but has led to a rise in the Choice boxed beef cutout value since the start of the year which has increased 41.1% ($85.06) to 291.79 per cwt.” Choice price was $312.37 Tuesday.
On the other side of the trade, LMIC analysts say the five-area direct weekly weighted average steer price rose from $111.28/cwt. at the start of the year to $122.03 in mid-April. Since then, prices declined.
Tyson Foods, Inc. provided another perspective in its second-quarter financial results released Monday.
“Beef sales volume decreased during the second quarter of fiscal 2021 due to a reduction in live cattle processed, partially associated with the impacts of severe winter weather and a challenging labor environment,” according to the Tyson report. “…Average sales price increased in the second quarter and first six months of fiscal 2021 as demand for our beef products remained strong. Operating income increased in the second quarter and first six months of fiscal 2021 due to strong demand as we continued to optimize revenues relative to live cattle supply, partially offset by production inefficiencies and direct incremental expenses related to COVID-19.”
Dean Banks, Tyson Foods President and CEO, noted, “We’re seeing substantial inflation across our supply chain, which will likely create margin pressure during the back half of the year.”