Cattle futures and other commodities gained on Monday with the weight of a potential government shutdown averted, if only temporarily. However, Cattle futures closed a ways from session highs.
Feeder Cattle futures closed an average of $1.05 higher.
Live Cattle futures closed an average of 55¢ higher.
Grain and Soybean futures also closed higher Monday, buoyed by the averted government shutdown and new-month positioning.
Corn futures closed mostly 10¢ to 12¢ higher.
KC HRW Wheat closed mostly 11¢ to 12¢ higher.
Soybean futures closed 5¢ to 9¢ higher, except for 2¢ to 4¢ higher in the front four contracts.
Negotiated cash fed cattle trade was at a standstill in all regions through Monday afternoon, according to the Agricultural Marketing Service.
Last week, FOB live prices were steady in the Southern Plains at $183/cwt., steady to $1 lower in Nebraska at $184 and $1-$2 lower in the western Corn Belt at $184. Dressed delivered prices were $2 lower at $290.
The five-area direct weighted average steer price last week was $183.64/cwt. on a live basis, which was $1.09 less than the previous week. The weighted average fed steer price in the beef was $1.72 lower at $290.27.
Choice boxed beef cutout value was $2.30 higher Monday afternoon at $303.08/cwt. Select was 94¢ higher at $276.98/cwt.
Major U.S. financial indices closed mixed Monday despite the reprieve from the government shutdown as investors focused on high interest rates and slow economic growth.
The Dow Jones Industrial Average closed 74 points lower. The S&P 500 closed fractionally higher. The NASDAQ was up 88 points.
West Texas Intermediate Crude Oil futures (CME) closed 63¢ to $1.97 lower through the front six contracts.
Consumers continue to pay more for increased supplies of higher-grading beef.
Since 1996, Prime-graded beef has moved from just over $5/cwt. to about $15, according to analysts with the Livestock Marketing Information Center (LMIC) in the latest Livestock Monitor.
“Natural premiums are more than $30/cwt. on average. All natural premiums only began to be reported in 2016,” LMIC analysts say. “Interestingly, Certified Angus Beef (CAB) has maintained the least volatility in the premium space compared to the others but has risen substantially in the last two decades but is still not as largely incentivized as Prime. Today’s premium for CAB beef averages just under $5/cwt.”
On the other end of the quality spectrum, discounts for lower quality grades have grown significantly during the same period.
“The average discount for Standard-graded beef has nearly doubled since 1996 and is sitting at almost -$40/cwt.,” according to LMIC. “Select discounts have slightly more than doubled in that timeframe and last week averaged -$21.67/cwt.”