Cattle futures traded mixed Monday, holding their own in the face of higher grain futures.
Feeder Cattle futures closed an average of 36¢ higher, except for an average of 15¢ lower in two contracts.
Live Cattle futures closed mixed, from an average of 38¢ lower (10¢ to 70¢ lower) through Feb and then unchanged to an average of 10¢ higher.
Grain and Soybean futures bounced back some Monday with apparent technical resistance to the downside and perhaps some weather premium with the drier, hotter near-term outlook in parts of the Corn Belt.
Corn futures closed mostly 7¢ to 8¢ higher.
KC HRW Wheat closed fractionally higher to 3¢ higher.
Soybean futures closed mostly 15¢ to 21¢ higher.
Negotiated cash fed cattle trade was at a standstill in all regions through Monday afternoon, according to the Agricultural Marketing Service.
For the week, live prices were steady in the Southern Plains at $170/cwt., $2 higher in Nebraska at $178 and steady to $3 higher in the western Corn Belt at $177-$178. Dressed prices were steady to $2 higher at $280-$282.
The five-area direct weighted average fed steer price was $1.02 higher last week at $175.15/cwt. The weighted average fed steer price in the beef was $1.36 higher at $280.84.
Choice boxed beef cutout value was $2.80 higher Monday afternoon at $303.90/cwt. Select was 51¢ lower at $283.43/cwt.
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Major U.S. financial indices closed mixed Monday, as investors continued to eye debt ceiling negotiations.
The Dow Jones Industrial Average closed 140 points lower. The S&P 500 closed fractionally higher. The NASDAQ was up 62 points.
West Texas Intermediate Crude Oil futures (CME) closed 32¢ to 44¢ higher through the front six contracts.
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Beef cow slaughter continues less than last year but the year-to-date decline of 11%, with about five months of the year already gone, suggests the herd will continue to liquidate some more this year, says Derrell Peel, Extension livestock marketing specialist at Oklahoma State University, in his weekly market comments.
“In 2014, beef cow slaughter dropped just over 18% from the previous year to put the brakes on herd liquidation. I suspect that the ongoing drought is masking continued liquidation in some areas up to this point,” Peel explains. “The low bred heifer inventory combined with the relatively slow reduction in beef cow slaughter makes additional beef cow herd liquidation this year probably unavoidable. In other words, if drought conditions continue to improve, 2024 will probably be the low point of the herd similar to 2014, albeit at even lower beef cow inventories.”
Assuming drought continues to fade, Peel explains, “What all of this means is that heifer retention likely will begin in earnest this fall with heifer calves to be bred in 2024. Modest herd expansion is possible next year with faster herd expansion after 2024.”