So far, signs point to at least steady prices for negotiated cash fed cattle trade this week.
Although there were too few transactions for a trend, early live sales were mainly steady on Wednesday at $115/cwt. in the Southern Plains and at $116 in Nebraska.
Early in the day, 137 head sold out of the 483 head offered in the weekly Fed Cattle Exchange auction. Two lots from Kansas sold for a weighted average price of $115/cwt.
The outlook for steady cash and recently stronger wholesale beef values helped Cattle futures recover some early ground, following early pressure.
Live Cattle futures closed an average of 44¢ higher, (7¢ to 80¢ higher). Perhaps traders are also starting to account for the higher production cost in the deferred contracts.
Feeder Cattle futures closed narrowly mixed, from an average of 26¢ lower to an average of 24¢ higher.
Wholesale beef values were steady on Choice and weak on Select with light to moderate demand and offerings, according to the Agricultural Marketing Service.
Choice boxed beef cutout value was 24¢ higher Wednesday afternoon at $223.53/cwt. Select was 46¢ lower at $209.99.
Corn futures closed 1¢ to 2¢ lower through Jul ‘20 and then mostly 1¢ higher.
Soybean futures closed 10¢ to 16¢ higher through Aug ‘20 and then mostly 4¢ to 9¢ higher.
Major U.S. financial indices closed lower again Wednesday, with continued pressure from declining bond yields and bank stocks, tied to signs of slowing economic growth here and abroad.
The Dow Jones Industrial Average closed 221 points lower. The S&P 500 closed 19 points lower. The NASDAQ was down 60 points.
The Livestock Marketing Information Center (LMIC) projects second-quarter cattle prices to average slightly higher year over year: about 2% higher for fed cattle and 1% more for steer calves (500-600 lbs.) and feeders (700-800 lbs.).
That follows a first-quarter decline of 0.1% for fed steers (5-Area Direct). Basis the Southern Plains, feeder steer prices were 3.9% less (-$5.76/cwt.), while steer calves averaged 4.8% less (-$8.60/cwt.).
“U.S. cattle slaughter for the first quarter of 2019 was slightly above a year ago (up 0.7%), while tonnage produced was 0.8% below 2018’s,” say LMIC analysts, in the latest Livestock Monitor. “The year-over-year increase was due to larger heifer and cow (beef and dairy) harvests. Production declined because of lower dressed weights for steers, heifers, and cows.”
LMIC forecasts fed steer prices in the third quarter (July-September) to average $112-$115/ cwt., about 3% more year over year. Feeder steers are expected to be 3% to 4% below the previous year’s average of $155.99. Steer calf prices for the quarter are pegged flat to 1% higher.
In the fourth quarter, LMIC analysts say, “Compared to 2018, fed cattle prices may be higher (up 1% to 3%), 700-800-pound steers flat, and calves unchanged to 4% stronger.”