Cattle futures closed lower Monday, hamstrung by more negative outside markets, this time tied to war between Israel and Hamas.
Feeder Cattle futures closed an average of $1.68 lower.
Live Cattle futures closed an average of $1.07 lower.
Negotiated cash fed cattle trade ranged from inactive on very light demand to a standstill through Monday afternoon, with too few transactions to trend, according to the Agricultural Marketing Service.
Last week, FOB live prices were $1 lower in the Southern Plains at $182/cwt. and $1 lower in the north at $183. Dressed delivered prices were steady to $2 lower at $288-$290.
Choice boxed beef cutout value was $1.41 higher Monday afternoon at $303.42/cwt. Select was $1.72 higher at $277.50/cwt.
Corn and Soybean futures closed lower on harvest pressure.
Corn futures closed 1¢ to 3¢ lower.
Soybean futures closed mostly 4¢ to 6¢ lower.
KC HRW Wheat closed mostly 12¢ higher on geopolitical risk.
Major U.S. financial indices closed higher Monday, thanks to a surprising reversal, following strong pressure from the unrest in the Middle East.
The Dow Jones Industrial Average closed 197 points higher. The S&P 500 closed 27 points higher. The NASDAQ was up 52 points.
West Texas Intermediate Crude Oil futures (CME) closed $2.66 to $3.59 higher through the front six contracts.
At best, next year looks to be a year of stabilizing cow numbers rather than expansion, according to Derrell Peel, Extension livestock marketing specialist at Oklahoma State University, in his weekly market comments.
“Neither Mother Nature nor producers seem to be in much of a hurry to get started with the next herd expansion,” Peel says. “When it does start, herd rebuilding is likely to be a lengthy process with strong prices supporting the recovery of the industry.”
Need for expansion is obvious. Peel points out the nation’s beef cow herd of 28.9 million head Jan. 1 was the smallest since 1962 with liquidation forced by drought.
“Domestic and international demand for U.S. beef will support and encourage a significantly larger herd going forward,” Peel says. “This will require increased heifer retention and reduced cow culling that will further squeeze cattle slaughter and beef production for at least 2-3 years.”
However, lingering drought and economic uncertainty appear to be delaying expansion so far.
“While some producers can’t rebuild due to continued drought or drought recovery, other producers have compelling financial needs to pay down debt or restore equity drained by drought and high input costs before retaining any heifers,” Peel says. “Some older producers are looking at the current market as a means to exit cattle production, or at least, cow-calf production. Sharply higher interest rates and the cost of financing herd rebuilding is also a deterrent for some producers and lenders, especially when combined with some skepticism about how long the current market will last.”