When all was said and done last week, negotiated cash fed cattle sales ended up $2 higher on a live basis in the Southern Plains at $112/cwt., mostly $5 higher in Nebraska at mostly $115 and $3-$4 higher in the western Corn Belt at $113-$114. Dressed sales were mostly $5 higher at mostly $180.
Cattle futures edged mostly higher to start the week, maintaining gains from Friday’s rally, borne by higher cash fed cattle prices and increasing wholesale beef values.
Live Cattle futures closed an average of 39¢ higher.
Other than 5¢ lower and unchanged in the front two contracts, Feeder Cattle futures closed an average of 63¢ higher (17¢ to $1.07 higher).
Wholesale beef values were higher to sharply higher on good demand and moderate offerings, according to the Agricultural Marketing Service.
Choice boxed beef cutout value was $1.61 higher Monday afternoon at $234.81/cwt. Select was $2.87 higher at $210.38.
Corn futures closed 3¢ to 6¢ lower in the front four contracts and then mostly 1¢ to 2¢ lower.
Soybean futures closed mostly 2¢ higher through Jan. ’21 and then mostly fractionally lower.
Major U.S. financial indices closed higher Monday, with follow-through buying from Friday’s rally, sparked by a strong monthly employment report and continued strong quarterly corporate earnings.
The Dow Jones Industrial Average closed 114 points higher. The S&P 500 closed 11 points higher. The NASDAQ was up 46 points.
Cyclical price support could be nearer than previously supposed, based on recent estimates from the Livestock Marketing Information Center (LMIC).
First, LMIC projects the Jan. 1 cattle inventory will be slightly less year over year.
“Regional cow slaughter suggests beef cows are being slaughtered at a much higher rate in most of the regions except the Southern Plains,” say LMIC analysts, in the latest Livestock Monitor. “Total beef cow slaughter through 42 weeks of the year is up 2.9%. Heifer slaughter continues to post large gains compared to a year ago. Weekly heifer slaughter year to date is up 7.3%.”
Further, LMIC analysts explain heifer slaughter is on pace for about 500,000 head more than was in the Jan. 1 ‘other heifer’ category.
“That would indicate more heifers that were considered for replacement were pulled from the herd,” they say. “The latest Cattle on Feed report showed 39% of the on-feed mix were heifers. This suggests that the number of heifers held for replacement for beef-type animals will also likely be below a year ago. LMIC is penciling in beef heifer replacements down more than 2%.”
As for dairy, LMIC analysts say the cow inventory edged lower since last year, with the latest milk production report indicating 30,000 fewer cows than when the year began.
Finally, LMIC analysts point out steer slaughter for the first 42 weeks of this year is more than 2% less than the same period last year.
“Reconciling the steer slaughter deficit against 2018’s large 1.8% increase in the calf-crop year from the previous year has been difficult,” they say. “The calf crop and the number reported for steers 500 lbs. and heavier both appear to be too high in last year’s report (Cattle).”