Cattle futures rose Wednesday as fundamental strength returned.
Feeder Cattle futures closed an average of $1.52 higher (57¢ higher at the back to $2.12 higher toward the front).
Live Cattle futures closed an average of 46¢ higher.
Negotiated cash fed cattle trade was limited on light demand in all major cattle feeding regions through Wednesday afternoon, with too few transactions to trend, 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 $228.
Choice Boxed beef cutout value was 98¢ lower Wednesday afternoon at $247.06/cwt. Select was $2.69 lower at $219.22.
Corn futures closed 1¢ to 2¢ higher.
Soybean futures closed 10¢ to 13¢ lower through Sep ‘23 and then mostly 7¢ lower.
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Major U.S. financial indices settled slightly lower Wednesday as investors took a breather and profits, apparently, in a volatile session that started out sharply lower before recovering most of the ground by the end.
The Dow Jones Industrial Average closed 42 points lower. The S&P 500 closed 7 points lower. The NASDAQ was down 27 points.
West Texas Intermediate Crude Oil futures (CME) closed $1.24 to $1.86 higher higher though the first six contracts.
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Less beef is grading Choice in recent months and the Choice-Select spread is growing due in part to less beef production from steers and heifers and more from cows, says Brenda Boetel, extension livestock economist at the University of Wisconsin-River Falls.
In the latest issue of In the Cattle Markets, Boetel explains beef production was 1.7% higher year over year through the first three quarters of 2022, but steer slaughter is down 1.7%, while heifer slaughter is up 0.9% and cow slaughter is up 0.7%.
“Combining weekly slaughter and dressed weights leaves fed beef production about 1.6% higher than a year ago while cow beef is up 4.3%,” Boetel says. “The percent of carcasses presented for grading over the last month that are grading Prime and Choice are running about 1.4% and 0.7% below a year ago, respectively. About 0.7% more carcasses are grading Select than a year ago.”
The Choice-Select spread since September 1 has averaged $24.26/cwt. since Sept. 1, compared to $31.69 last year, according to Boetel.
“The Choice-Select spread tends to increase seasonally from the end of January until mid-June and then decrease until end of September, before resuming an increase until before the December holidays,” Boetel explains. “Except for a short-lived dip after Labor Day, the Choice-Select spread has been steadily increasing since the end of February when the spread was at a negative $2.00 on February 23, 2022 (meaning Select boxed cutout was higher than Choice boxed cutout).”