Negotiated cash fed cattle trade was mostly inactive on very light demand in Nebraska and the Texas Panhandle through Tuesday afternoon. Elsewhere, it was at a standstill, according to the Agricultural Marketing Service. There were too few transactions to trend in any region.
Cattle futures rallied Tuesday, likely helped along by the performance-depressing winter storm, as well as apparent fund positioning.
Live Cattle futures closed an average of $1.01 higher, from 65¢ higher toward the front of the board to $1.30 higher toward the back.
Feeder Cattle futures closed an average of $1.41 higher, from 60¢ higher in spot Oct to $1.72 higher.
Choice was $1.13 lower at $206.70. Select was 18¢ higher at $188.67.
Corn futures closed 1¢ to 2¢ lower across the front half of the board and then fractionally higher to 1¢ higher.
Soybean futures closed 4¢ to 8¢ lower through Jan ’22 and then fractionally lower to 3¢ lower.
Except for the tech sector, Major U.S. financial indices closed lower again Tuesday as COVID cases continued to spike higher.
The Dow Jones Industrial Average 222 points lower. The S&P 500 closed 10 points lower. The NASDAQ was up 72 points.
“Drought conditions will likely play an important part of placements this year,” says David Anderson, Extension livestock economist at Texas A&M University, in the latest issue of In the Cattle Markets.
Reflecting on the recent Cattle on Feed report, Anderson explains “Difficult wheat pasture establishment and development may force more to feedlots. Drought in the West and Texas may force some more placements. More feeder cattle continue to come from Mexico adding to available supplies for placement.”
As it is, in his weekly market comments, Derrell Peel, Extension livestock marketing specialist at Oklahoma State University says total feedlot placements during the third quarter (July-September) were 8.5% more year over year. More specifically, during that same period, he explains year-over-year feedlot placements were 17.0% higher in Kansas, 14.5% more in Nebraska, 13.4% higher in Oklahoma, up 9.3% in Colorado, 2% higher in Texas and 1.9% higher in Iowa.
“The Kansas Focus on Feedlots data shows that feedlot average daily gains have been above year-ago levels all year with improved feed conversions, as well,” Peel says. “Improved gains and feed efficiency have pulled feedlot cost of gain below year-ago levels. Excellent feedlot performance has contributed to heavy cattle weights thus far this year.” He expects steer carcass weights to average more than 900 lbs. this year for the first time in history.
On a related note, analysts with the Livestock Marketing Information Center (LMIC) point out that heifers as a percentage of cattle on feed climbed last year but remained steady so far this year.
“Evidence of the slaughter plant disruptions were evident in quarter-three figures, where heifers on feed climbed to 38.5%, up from 37.3% in the prior quarter. Heifers, because of smaller carcass weights, were likely held longer to allow for very heavy steers to have slaughter priority,” say LMIC analysts, in the latest Livestock Monitor. “The heifer count as of Oct. 1 moved a full percent lower, even as cattle numbers on feed increased significantly. The fourth quarter proportion is 37.6% of steers and heifers on feed.”
The LMIC folks also point out beef cow slaughter since July 1 is higher year over year in the Pacific Northwest, West Coast and Southern Plains.