Cattle futures extended gains Wednesday, supported by renewed buying interest in the previous session.
Feeder Cattle futures closed an average of 63¢ higher (2¢ to $1.15 higher).
Live Cattle futures closed an average of 57¢ higher (25¢ to $1.05 higher), except for 5¢ lower in the back contract.
Negotiated cash fed cattle trade ranged from slow on light demand to mostly inactive on light demand through Wednesday afternoon, according to the Agricultural Marketing Service.
So far this week, FOB live sales are $2 lower in the Southern Plains at $175/cwt. and $1 lower in Nebraska at $175.
Last week, FOB live prices were $175-$178 in the western Corn Belt. Dressed delivered prices were mostly $280 in Nebraska and $278-$280 in the western Corn Belt.
Choice boxed beef cutout value was $1.14 lower Wednesday afternoon at $297.03/cwt. Select was $2.26 lower at $264.09/cwt.
Corn futures closed mostly 2¢ higher.
KC HRW Wheat futures closed mostly 12¢ to 16¢ higher.
Soybean futures closed mostly fractionally higher through Sep ’25. and then 1¢ to 2¢ higher.
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Major U.S. financial indices closed little changed Wednesday.
The Dow Jones Industrial Average closed 13 points higher. The S&P 500 closed 4 points lower. The NASDAQ was down 23 points.
West Texas Intermediate Crude Oil futures (CME) closed $1.23 to $1.45 higher through the front six contracts.
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Beef demand is likely to increase seasonally heading into Christmas, but Andrew P. Griffith, agricultural economist at the University of Tennessee questions whether the support will be as strong as typical.
“It now seems apparent that consumers are feeling the squeeze on disposable income,” Griffith says in his weekly market comments. “Despite the slowdown in inflation, prices of most goods remain elevated. At the same time, sustained high energy prices are pulling on disposable income, as are higher interest rates. All of these factors are going to make it difficult for packers to push wholesale beef prices higher in the near term. The one thing that may provide support for wholesale beef prices in the near future is a reduction in beef supply, but that is probably six or more months down the road.”
Last week’s USDA Cold Storage report reflected the cusp of declining supplies.
Total pounds of beef in freezers Oct. 31 were 6% more than the previous month but 13% less year over year. Frozen pork supplies were down 6% from the previous month and down 14% from the previous year. Total red meat supplies in freezers were slightly less than the previous month and down 14% from a year earlier.
“Red meat numbers are unsurprising as production is mostly down across all categories,” according to the Livestock Marketing Information Center (LMIC) in the latest Livestock Monitor.
Total frozen poultry supplies were down 6% from the previous month but slightly higher than a year ago.
“Whole chickens were up 11% in broilers, and 58% in hens, while whole tom turkeys fell 3% and whole hen turkeys were even with a year ago,” LMIC analysts explain. “Parts were a different story on the turkey side with every category posting year-on-year growth. The largest increase was mechanically deboned turkey, up almost 200% from a year ago, followed by breast meat, up 82%. Chicken parts were largely lower than last year, with the exception of chicken breast, up 6%.”