Cattle futures gained on Wednesday, led by Feeder Cattle, helped along by positive outside markets and weaker Corn futures.
Feeder Cattle futures closed an average of $2.15 higher, except for 62¢ lower in spot Nov.
Live Cattle futures closed an average of $1.33 higher (90¢ to $1.92 higher).
Negotiated cash fed cattle trade was slow on light to moderate demand in Nebraska through Wednesday afternoon, according to the Agricultural Marketing Service. Dressed delivered prices were mostly $5 lower at $282/cwt. FOB live prices last week were $181.50.
Elsewhere, trade ranged from slow on light demand to a standstill with too few transactions to trend.
Last week, FOB live prices were $181/cwt. in the Texas Panhandle, $180 in Kansas and $178-$180 in the western Corn Belt. Dressed delivered prices were $283-$287 in the western Corn Belt.
Choice boxed beef cutout value was 66¢ higher Wednesday afternoon at $296.33/cwt. Select was 3¢ lower at $267.85/cwt.
Corn futures closed mostly 5¢ to 7¢ lower.
KC HRW Wheat closed 1¢ to 3¢ lower.
Soybean futures closed 1¢ to 4¢ lower through Jly ‘24 and then mostly 3¢ to 5¢ higher.
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Major U.S. financial indices extended gains Wednesday, buoyed by a decline in the monthly Producer Price Index, another hopeful sign of cooling inflation.
The Dow Jones Industrial Average closed 163 points higher. The S&P 500 closed 7 points higher. The NASDAQ was up 9 points.
West Texas Intermediate Crude Oil futures (CME) closed 84¢ to $1.60 lower through the front six contracts.
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Reflecting on last week’s hard selloff in Cattle futures, Stephen Koontz, agricultural economist at Colorado State University explains underlying supply and demand fundamentals did not support a continued trek higher.
“Supplies are tightening and demand has been strong but the movement to record high prices is well in advance of that which can reasonably be supported by fundamentals,” Koontz say on the latest issue of In the Cattle Markets from the Livestock Marketing Information Center.
For one thing, Koontz says it is unlikely that current marketings have reduced inventories of cattle on feed for more than 120 days and more than 150 days.
“These inventories will likely weigh on the market through the end of the year,” Koontz says. “And this perspective is confirmed by changes in steer and heifer slaughter weights. Slaughter weights have climbed six of the last eight weeks – in the face of colder weather – but also following the normal seasonal pattern. However, the overall main thing we have not observed this year is tighter supplies due to herd rebuilding. The continued marketing of heifers through fall calf sales indicates herd liquidation continues.”
Moreover, while domestic consumer beef demand remains strong, Koontz notes it is weakening quarter to quarter and year over year.