Negotiated cash fed cattle trade was limited on light demand in Nebraska through Monday afternoon. There were a few live trades at $117.50 to $118.00/cwt. but too few to trend. Elsewhere, trade ranged from mostly inactive on light demand to a standstill, according to the Agricultural Marketing Service.
The average five-area direct fed steer price last week was $118.89/cwt. on a live basis, which was $2.47 less than the previous week. The average steer price in the beef was $1.67 less at $190.44.
Cattle futures managed to fade stronger pressure early to close mixed on Monday with most of the pressure in nearby contracts.
Live Cattle futures closed an average of 23¢ higher, except for $1.27 and 27¢ lower in the front two contracts.
Feeder Cattle futures closed an average of 69¢ higher (5¢ to $1.40 higher), except for an average of 27¢ lower in three contracts.
Choice boxed beef cutout value was $2.80 higher Monday afternoon at $299.30/cwt. Select was 74¢ higher at $283.
Corn futures closed mixed; mostly fractionally lower to 2¢ higher, except for 7¢ lower and 6¢ higher in the front two contracts.
Soybean futures closed 4¢ to 10¢ lower through the front three contracts, then mostly 2¢ to 5¢ higher through Aug ’22; mostly fractionally lower across the rest of the board.
Major U.S. financial indices closed mostly higher Monday, buoyed by continued progress in COVID-19 vaccinations and easing health restrictions.
The Dow Jones Industrial Average closed 238 points higher. The S&P 500 closed 11 points higher. The NASDAQ was down 67 points.
“Overall cattle market conditions are still expected to improve year over year in the second half of the year. However, current challenges are somewhat more severe and taking longer to clear than earlier expected. Market conditions are very dynamic now and the next few weeks may determine the tone of markets for the remainder of the year,” says Derrell Peel, Extension livestock marketing specialist at Oklahoma State University.
In his weekly market comments, Peel explains ample supplies are pressuring fed cattle prices as feedlots struggle to get more current.
“On the other end, feeder cattle are being squeezed between a stagnant fed market and rising feed prices. The pressure is weighing on feeder cattle markets with both cash feeder cattle prices and feeder futures moving lower in April,” Peel says.
As well, drought continues to deepen. Peel notes the Drought Severity and Coverage Index (DSCI) is at 180 for the U.S., the highest ever for April or May. He points out hay prices are increasing, too. The national average price for other hay in March was $142/ton versus $134 a year earlier. March prices for alfalfa were $181/ton compared to $172 the previous year.
‘There are indications that beef cow liquidation is accelerating,” Peel says. “March monthly beef cow slaughter was up 10.2% year over year. Beef cow slaughter in April is increasing but is difficult to interpret compared to pandemic-disrupted levels one year ago.”