Through Wednesday afternoon, negotiated cash fed cattle prices were mostly $1-$4 lower than last week on a live basis at: $124/cwt. in Nebraska; $122 in Kansas; $125-$126 in the western Corn Belt. Dressed trade was $4-$6 lower at mostly $200.
There were 837 head offered in the weekly Fed Cattle Exchange auction; 479 head (four lots) sold for a weighted average price of $122.15/cwt., for delivery at 1-9 days.
A rally in Lean Hog futures helped stem the degree of bleeding in Cattle futures Wednesday.
Except for $1.82 higher in the back contract, Live Cattle futures closed an average of 42¢ lower.
Except for 7¢ higher in Aug, Feeder Cattle futures closed an average of 37¢ lower.
Wholesale beef values were weak to lower on light demand and moderate offerings, according to the Agricultural Marketing Service.
Choice boxed beef cutout value was $1.62 lower Wednesday afternoon at $230.22/cwt. Select was 71¢ lower at $217.50.
Corn futures closed 3¢-6¢ higher through May ’20 and then mostly 2¢ higher. Presumably, some of the bounce came from weather-delayed planting.
Soybean futures closed 1¢-3¢ lower, extending losses as traders look for wet conditions to ultimately bring in more corn acres.
Major U.S. financial indices closed lower on Wednesday. Much of the pressure was attributed to the Fed standing pat on interest rates. Apparently, traders were looking for a rate cut, given ongoing sub-2% inflation.
“Information received since the Federal Open Market Committee met in March indicates that the labor market remains strong and that economic activity rose at a solid rate. Job gains have been solid, on average, in recent months, and the unemployment rate has remained low,” according to an FOMC statement. “Growth of household spending and business fixed investment slowed in the first quarter. On a 12-month basis, overall inflation and inflation for items other than food and energy have declined and are running below 2%. On balance, market-based measures of inflation compensation have remained low in recent months, and survey-based measures of longer-term inflation expectations are little changed.”
Pressure came despite the closely watched ADP Employment Report shattering expectations to the upside. That report indicates non-farm, private sector employment increased by 275,000 in April.
The Dow Jones Industrial Average closed 162 points lower. The S&P 500 closed 22 points lower. The NASDAQ was down 45 points.
Dairy cattle continue to be a significant contributor to the commercial U.S. beef supply, say Brenda Boetel, Extension economist and Jared Geiser, research assistant from the University of Wisconsin-River Falls.
“Despite growing beef cattle inventories since 2014, dairy animals have been a stable source of beef and continue to play a key role in filling U.S. beef demand,” explain Boetel and Geiser, in the latest issue of In the Cattle Markets. “In 2018 the dairy sector contributed 5.6 billion lbs. (21.0 %) of beef to the U.S.”
For perspective, they point out total U.S. commercial beef production last year was 26.9 billion lbs., the most since 2002. Beef production between 2002 and 2018 ranged from 23.7 billion lbs. in 2014 to 27.0 billion lbs. in 2002, with dairy animals contributing 22% in 2014 and 18% in 2002.
“The contribution from dairy cattle varies based on the size of the native cattle herd and its contribution to the beef supply, as well as the number of cull dairy cows,” Geiser and Boetel explain. “Finished dairy steers are the largest beef contributor from the dairy industry followed by cull cows and finished heifers.”