Cattle futures were higher Wednesday, buoyed by stronger wholesale beef values and outside markets.
Toward the close, Live Cattle futures were an average of $2.61 higher. Feeder Cattle futures were an average of $4.42 higher.
Negotiated cash fed cattle trade was mostly inactive on light demand in all major cattle feeding regions through Wednesday afternoon, according to the Agricultural Marketing Service.
Last week, FOB live prices were $260/cwt. in the Texas Panhandle, $259-$260 in Kansas, $258-$265 in Nebraska and mostly $260 in the western Corn Belt. Dressed delivered prices were $408-$410 in Nebraska and mostly $410 in the western Corn Belt.
Choice boxed beef cutout value was $1.82 higher Wednesday afternoon at $394.72/cwt. Select was $1.01 lower at $389.29.
Grain futures closed lower Wednesday, as Crude Oil prices continued to retreat.
Toward the close, and through near Mar contracts, Corn futures were 4¢ to 5¢ lower. Soybean futures were fractionally lower to 1¢ higher. Kansas City HRW Wheat futures were 8¢ to 9¢ lower.
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Major U.S. financial indices crept higher Wednesday with growing optimism for peace talks between the U.S. and Iran.
The Dow Jones Industrial Average closed 182 points higher. The S&P 500 closed 1 point higher. The NASDAQ was up 18 points.
Through mid-afternoon, West Texas Intermediate Crude Oil futures (CME) were $1.57 to $4.41 lower through the front six contracts.
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Although cash fed cattle prices weakened a touch last week, Bernt Nelson, economist with the American Farm Bureau Federation notes the strong fundamentals underpinning historically high cash cattle prices.
Specifically, in the latest issue of In the Cattle Markets from the Livestock Marketing Information Center, Nelson Points to:
- Cattle supplies are at a 75-year low
- Consumer demand is strong
- Herd rebuilding takes two years from the time a heifer calf is born, until it can have a calf of its own and create meaningful herd expansion.
- Approximately 70% of the total U.S. cattle inventory is under drought conditions
Further Nelson notes there was no suggestion of herd expansion in the recent Cattle on Feed report.
“Herd rebuilding decisions continue to be clouded by ongoing challenges, including persistent drought, elevated input costs and animal health risks such as New World screwworm,” Nelson says. “These factors are likely to keep production risks elevated even while beef demand remains strong, suggesting continued volatility in the cattle market in the months ahead.”