Cattle futures extended losses on Monday, pressured by last week’s lower cash fed cattle prices and skittishness ahead of this week’s trade.
Feeder Cattle futures closed an average of 92¢ lower (55¢ to $1.27 lower).
Live Cattle futures closed an average of 59¢ lower
Negotiated cash fed cattle trade was mostly inactive with very light demand in all regions through Monday afternoon with too few transactions to trend, according to the Agricultural Marketing Service.
Live prices last week were $173/cwt. in the Southern Plains, $178-$180 in Nebraska and $180 in the western Corn belt. Dressed prices were $283-$286 in Nebraska and $285 in the western Corn Belt.
The five-area direct weighted average fed steer price last week was $177.15/cwt. on a live basis, which was $1.42 lower. The average fed steer price in the beef was $3.37 lower at 284.05.
Choice boxed beef cutout value was $1.42 lower Monday afternoon at $310.02/cwt. Select was $2.66 higher at $291.00/cwt.
Corn futures closed mostly 2¢ to 3¢ lower on Monday.
KC HRW Wheat closed 11¢ to 19¢ lower through Jly ‘24, and then mostly 8 to 9¢ lower.
Soybean futures closed mostly 10¢ to 15¢ higher.
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Major U.S. financial indices closed little changed but lower Monday as investors await the next Fed meeting.
The Dow Jones Industrial Average closed 46 points lower. The S&P 500 closed 1 point lower. The NASDAQ was down 13 points.
West Texas Intermediate Crude Oil futures (CME) closed $1.06 to $1.12 lower through the front six contracts.
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Nationwide, steers sold steady to $3/cwt. higher in the Southcentral region last week but steady to $3 lower in other regions, according to the Agricultural Marketing Service. Heifers sold from $1 lower to $2 higher.
According to AMS analysts, “Good demand remains for all weights of steers and heifers, but cattle feeders and backgrounders slowed a little in their pursuit of chasing the feeder market higher.”
In his weekly market comments, Andrew P. Griffith, agricultural economist at the University of Tennessee notes cattle cash and futures prices have been chasing each other for three months.
“Markets are just like humans or any animal that has run a sprint. They get tired and need to catch their breath,” Griffith says. “These types of runs also tend to lead to exhaustion, which then results in a period of poor performance. This does not mean cattle market prices are going to make some big decline, but a slower and steadier price increase would indicate more stability in the market. The fundamentals of the cattle market certainly support strong cattle prices since beef demand is strong and domestic beef supply is expected to decline due to a smaller cattle inventory.”
Griffith explains the overall economy is the primary factor that could introduce weakness to the cattle markets.
“As leadership in the financial institution continues to attempt to curtail inflation with higher interest rates, there is no way to know for sure how this will influence consumers.” Griffith says. “It will certainly send some sort of ripple effects through the system.”