Surging Corn futures prices took Feeder Cattle futures down a peg Monday.
Feeder Cattle futures closed an average of $2.10 lower (80¢ lower toward the back to $2.75 lower toward the front).
Grain futures spiked higher with heightened concerns about Russia’s ongoing war on Ukraine.
Corn futures closed 10¢ to 15¢ higher through Sep ’23 then mostly 8¢ to 9¢ higher.
Soybean futures closed 5¢ to 7¢ higher through Sep ’23 and then mostly 2¢ to 3¢ higher.
Live Cattle futures were unable to fade the strong pressure, closing an average of 75¢ lower (52¢ to $1.05 lower).
Negotiated cash fed cattle trade ranged from a standstill to mostly inactive on light demand in all major cattle feeding regions through Monday afternoon, with too few transactions to trend, according to the Agricultural Marketing Service.
Last week, live prices were $144/cwt. in the Southern Plains, $145-$148 in Nebraska and $145-$149 in the western Corn Belt. Dressed prices were $230.
Choice Boxed beef cutout value was $1.44 lower Monday afternoon at $244.63/cwt. Select was $2.31 lower at $213.82/cwt.
Major U.S. financial indices continued to soften Monday with hangover pressure from the previous week’s bullish employment summary prompted further concern about the aggressiveness of Fed interest rate increases.
The Dow Jones Industrial Average closed 93 points lower. The S&P 500 closed 27 points lower. The NASDAQ was down 110 points.
West Texas Intermediate Crude Oil futures (CME) closed $1.42 to $1.51 lower though the front six contracts.
Cattle grading and increased cattle slaughter imply Choice beef production is 4% higher year over year, which is one reason for lower Choice beef prices in recent weeks, according to David Anderson, livestock economist with Texas A&M AgriLife Extension Service.
“The Choice beef cutout has been sliding lower for a number of weeks. Last week’s average Choice cutout was $247/cwt., which is an $18/cwt. decline over the last eight weeks. It is also the lowest since the first week of April 2021,” Anderson says, in the latest issue of In the Cattle Markets from the Livestock Marketing Information Center. “Increasing supplies of Choice beef may be one reason for the decline, but it can also be an implication of some shifting demand.”
On the other hand, even with increased cattle slaughter, Prime beef production declined over the last eight weeks, leading to a $16/cwt. increase in Prime cutout value, according to Anderson.
“While consumers may be switching around between cuts of beef and other meats based on relative prices and budget constraints, available supplies certainly provide ample reason for changing cutout values,” Anderson says.