Cattle futures bounced back Monday, helped along by higher wholesale beef values.
Choice Boxed beef cutout value was $2.19 higher Monday afternoon at $245.94/cwt. Select was $1.18 higher at $221.31/cwt.
Feeder Cattle futures closed an average of $1.23 higher.
Live Cattle futures closed an average of 89¢ higher.
Negotiated cash fed cattle trade was at a standstill in all major cattle feeding regions through Monday afternoon, according to the Agricultural Marketing Service.
Live prices last week were $143/cwt. in the Southern Plains and $145 in Nebraska and the western Corn Belt. Dressed prices were at $228.
Corn futures closed 3¢ higher through Jly ‘23 and then 1¢ to 2¢ lower.
Soybean futures closed 5¢ to 9¢ higher.
Major U.S. financial indices rallied back Monday with the start of the new week and quarter. Support included oversold conditions and a decline in bond yields.
The Dow Jones Industrial Average closed 765 points higher. The S&P 500 closed 92 points higher. The NASDAQ was up 239 points.
West Texas Intermediate Crude Oil futures (CME) closed $2.91 to $4.14 higher though the first six contracts.
As the last leg of the current cattle cycle unfolds with herd contraction since 2018-19, Josh Maples, Extension livestock economist at Mississippi State University, offers insights to the current cattle cycle, likely cyclically high prices ahead and the trigger for expansion.
“How long we continue to contract will be directly impacted by drought and pasture conditions. The current drought draws comparisons to the 2011-2013 and has led to similar liquidation impacts on the cattle inventory. Herd expansion will be difficult until the drought abates,” Maples explains in the latest Cattle Market Notes Weekly.
“Producer profitability will be the key driver of when the next expansion phase occurs and when the next cattle cycle begins.”
Maples offers 2014-15 as an example. Record high prices were achieved during the last cycle low for cattle numbers, which was driven by drought and seven years of herd contraction.
“Just a few years ago, the thought of reaching those record price levels again seemed far-fetched. However, we are again experiencing many of the same ingredients that led to the 2014-15 market,” Maples says. “Cattle futures markets for 2023 are at levels not seen since 2015. The timing is still up in the air, and beef demand will certainly matter, but the end of the current cattle cycle may ultimately not look all that different from the end of the last one.”