Cattle futures closed higher Wednesday amid growing open interest and thoughts cash fed cattle prices will gain this week.
Feeder Cattle futures closed an average of 88¢ higher (57¢ to $1.27 higher).
Live Cattle futures closed an average of 71¢ higher (7¢ to $1.20 higher).
Negotiated cash fed cattle trade ranged from mostly inactive on light demand to a standstill in all major cattle feeding regions through Wednesday afternoon, with too few trades to trend, according to the Agricultural Marketing Service.
Last week, FOB live prices were $185/cwt. in the Southern Plains, $183-$186 in Nebraska and $183-$185 in the western Corn Belt. Dressed delivered prices were $290.
Choice boxed beef cutout value was $3.00 lower Wednesday afternoon at $302.18/cwt. Select was 95¢ lower at $278.55/cwt.
Corn futures closed 1¢ to 3¢ lower. KC HRW Wheat closed mostly 5¢ to 8¢ higher. Soybean futures closed mostly 1¢ to 4¢ higher.
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Major U.S. financial indices continued higher Wednesday, buoyed by the Fed’s decision to hold interest rates steady.
The Dow Jones Industrial Average closed 221 points higher. The S&P 500 closed 44 points higher. The NASDAQ was up 210 points.
West Texas Intermediate Crude Oil futures (CME) closed 24¢ to 58¢ lower through the front six contracts.
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Recent heavy moisture is propping up wheat pasture prospects in key states.
For instance, in Oklahoma, Darrell Peel, Extension livestock marketing specialist at Oklahoma State University says, “In recent extension meetings, many producers have indicated that they expect to have wheat pasture, if somewhat later than usual, in many cases. Some producers have already purchased stockers, betting on the come, while others will be in the market now.”
Wheat planting overall is running about even with the five-year average, according to the most recent weekly Crop Progress report — 84% planted and 64% emerged. Condition is running ahead of last year with 47% rated Good and Excellent and 18% rated Poor and Very Poor.
“Current cash and futures prices imply a value of gain from November 1 to early March of about $1.50/lb. for a 475-lb. stocker steer,” Peel explains, in his most recent weekly market comments. “Depending on specific cost assumptions, this is about equal to the breakeven for winter grazing, providing returns to wheat pasture and labor but nothing beyond that for the cattle. If Feeder Cattle futures rebound somewhat, as I expect, there may be better opportunities to lock in additional returns in the coming weeks.”
Moreover, Peel says stocker calf prices are unlikely to show any seasonal weakness in the coming weeks, given fewer calves available year over year and stronger wheat pasture demand.