Negotiated cash fed cattle trade was at a standstill in all major feeding regions through Monday afternoon, according to the Agricultural Marketing Service.
Live prices last week were at $124/cwt. in the Southern Plains, $122-$124 in Nebraska and $122 in the western Corn Belt. Dressed prices were $196 in Nebraska and $193-$196 in the western Corn Belt. Between last week’s increased slaughter level and recent futures prices hopes are growing to budge cash prices higher this week.
Estimated total cattle slaughter last week of 657,000 head was 20,000 head more than the previous week and year. Estimated total year-to-date cattle slaughter of 25.63 million head was 815,000 head more (+3.3%) than the same time last year. Estimated year-to-date total beef production of 21.8 billion lbs. was 604.7 million lbs. more (+2.9%) than a year earlier.
Cattle futures found a little more traction Monday as traders appeared more confident in recent gains.
Feeder Cattle futures closed an average of 73¢ higher, except for 15¢ lower in spot Oct.
Live Cattle futures closed an average of 37¢ higher, except for 7¢ and 10¢ lower toward either end of the board.
Choice boxed beef cutout value was $2.15 lower Monday afternoon at $281.12/cwt. Select was 90¢ higher, though, at $263.64.
Corn futures closed mostly 1¢ to 2¢ higher.
Soybean futures closed mostly 9¢ to 14¢ lower.
Major U.S. financial indices closed closer Monday. Most of the pressure appeared to be investor worries about slowing economic growth as corporate earnings season arrives.
The Dow Jones Industrial Average closed 250 points lower Monday. The S&P 500 closed 30 points lower. The NASDAQ closed 93 points lower.
Cattle feeding returns continue positive this year, according to data from the Livestock Marketing Information Center (LMIC).
“September is the fifth month of 2021 to post positive returns,” say LMIC analysts, in the most recent Livestock Monitor. “Since April, estimated returns have been between $30-40 per head. Expectations are for the rest of 2021 feedlots to see continued profits, but are unlikely to see ‘home-run’ returns this year.” That’s based on LMIC’s data series that tracks cash-to-cash returns.
LMIC analysts note profit continues to be limited by high input costs. For instance, they point out September closeouts were based on a feeder cattle input cost of $139.28/cwt., the highest price in Dodge City since October of 2020.
“The next three months, all except one of the closeouts will see higher feeder cattle input costs. The good news is those higher feeder prices will be partially offset by feed costs that are easing lower than they were earlier in the year. Corn, sorghum, and protein costs have all fallen more than a dollar per unit from the summer highs. Still, cattle placed over the summer were very likely fed some very high- cost rations,” explain the LMIC folks.
LMIC currently projects fourth-quarter returns to average $30 per head, which would make for an average of $15 per head for the year.
“Expectations are for the first quarter of next year to face some rather steep declines, maybe as large as $80+ per head losses,” says LMIC analysts. “However, after the first quarter of 2022, feedlot profit outlook is expected to improve substantially.”