Negotiated cash fed cattle trade was slow with light to moderate demand in all major cattle feeding regions through Wednesday afternoon, according to the Agricultural Marketing Service.
Live prices were $2-$3 higher in the Southern Plains at $131-$132/cwt., $2 higher in Nebraska at $132 and $1-$2 higher in the western Corn Belt at $131-$132. There were too few dressed trades for a trend: $202-$204 last week.
Live Cattle futures were unable to capitalize on the stronger cash price, however. They closed narrowly mixed, from an average of 11¢ lower in five contracts to an average of 11¢ higher. Part of the pressure was likely due to lower wholesale beef prices.
Choice boxed beef cutout value was $2.28 lower Wednesday afternoon at $285.52/cwt. Select was $4.00 lower at $266.62.
Feeder Cattle futures closed an average of $1.26 lower with weight from resurgent grain futures.
Corn futures closed 13¢ to 14¢ higher in the front four contracts and then mostly 6¢ to 8¢ higher.
Soybean futures closed mainly 3¢ to 5¢ higher.
Major U.S. financial indices closed lower Wednesday with weaker tech stocks and renewed inflation concerns.
The Consumer Price Index for All Urban Consumers (CPI-U) increased 0.9% in October on a seasonally adjusted basis after rising 0.4% in September, according to the U.S. Bureau of Labor Statistics. Over the last 12 months, the all items index increased 6.2% before seasonal adjustment.
The Dow Jones Industrial Average closed 240 points lower. The S&P 500 closed 38 points lower. The NASDAQ was down 263 points.
Increasing feedlot cost of gain is pushing cattle out of the feedlot sooner, based on Kansas State University’s (KSU) Focus on Feedlots (FF) data.
In September, compared to a year earlier, analysts with the Livestock Marketing Information Center (LMIC) say the FF data indicates steers were on feed for an average of 159 days, compared to 175 days the previous year and 165 days for the five-year average (2015-19).
Likewise, heifers were on feed for an average of 169 days in September, versus 176 days last year and 160 days for the five-year average.
“Although average days on feed is lower, feedlots show cattle on feed over 120 days in October was up 3.3% from last year and 7.6% above the five-year average,” say LMIC analysts, in the latest Livestock Monitor.
Since the beginning of this year, those analysts explain average cost of gain for steers is up 32.8% ($27/cwt.) and heifer cost of gain is up 37.2% ($32). Average cost of gain in September was $109.29/cwt. for steers and $118.34 for heifers, the priciest in about eight years.
“It is also worth noting that the KSU Feedlot average cost of gain data does not include the cost of feeder, yardage, and interest costs,” LMIC analysts say. “Higher average cost of gain is primarily due to rising feed costs for corn, up 47.7% ($2.25) and ground alfalfa hay, up 31.2% ($43) since the start of the year. The higher cost of gain will also motivate cattle feeders to market cattle quicker.”