Cattle Current Daily—Oct. 18, 2022

Cattle Current Daily—Oct. 18, 2022

Cattle futures caught some wind Monday as traders seemed to focus more on the fundamentals, including recently stronger cash fed cattle prices and the likelihood that wholesale beef prices will begin their seasonal advance.

Feeder Cattle futures closed an average of $2.00 higher (95¢ higher in spot to $2.60 higher).

Live Cattle futures closed an average of 78¢ higher (55¢ to $1.42 higher).

Negotiated cash fed cattle trade was at a standstill through Monday afternoon, according to the Agricultural Marketing Service.

Last week, live prices were $145/cwt. in the Southern Plains and $148 in Nebraska and the Western Corn Belt. Dressed prices were $232 in Nebraska and $230-$232 in the western Corn Belt.

The five-area direct weighted average fed steer price last week was $146.99/cwt., which was 76¢ more than the previous week. The average fed steer price in the beef was $1.32 higher at $231.60.

Choice Boxed beef cutout value was $1.16 higher Monday afternoon at $248.14/cwt. Select was $2.67 higher at $219.61/cwt.

Cattle futures were also helped along by Corn futures closing mostly 4¢ to 6¢ lower. Soybean futures closed mostly 3¢ to 7¢ lower.

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Major U.S. financial indices rebounded on Monday with positive corporate earnings reports from key banks.

The Dow Jones Industrial Average closed 550 points higher. The S&P 500 closed 94 points higher. The NASDAQ was up 354 points.

West Texas Intermediate Crude Oil futures (CME) closed narrowly mixed through the front six contracts (15¢ lower to 9¢ higher).

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Drought continues to intensify across the U.S., according to the latest U.S. Drought Monitor (Oct. 13) with 82% of the nation classified from abnormally dry to exceptional drought.

“This level of arid conditions is the highest on record since the data series began in 2000 and higher than the drought of 2012,” according to analysts with the Agricultural Marketing Service (AMS). “Preliminary year-to-date cattle slaughter numbers for the first three quarters of the year were available this week and are very startling … In 2021, during this same time frame, beef cow slaughter was 9.1% higher than 2020. In 2022, it is 13.1% higher than last year and is now largest on record.”

AMS analysts add that year-to-date heifer slaughter is the largest since 2004 and 750,000 head more than the previous five-year average, as the widespread drought continues pushing replacement heifers into feed yards.

“Not surprisingly, we are tight on hay this year,” says James Mitchell, Extension livestock economist at the University of Arkansas, in the latest Cattle Market Notes Weekly. “The October Crop Production report forecasts hay production (excluding alfalfa) at 63.24 million tons or 11% lower year over year. In the August Crop Production report, USDA expected a 5% decline in hay production. This month’s report reflects a significant departure from earlier estimates.”

2022-10-17T18:02:11-06:00

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