Negotiated cash fed cattle trade remained largely undeveloped through Wednesday afternoon. The early tone was bearish, though, with AMS reporting early dressed sales in Nebraska $3-$8 lower at $167, on light trade and moderate demand.
Fat cattle auctions were mixed.
For instance, there was no trend, but demand was good and trade active at Tama, IA, where Choice 2-4 steers weighing an average of 1,371 lbs. brought $110.21/cwt.
On the other hand, the AMS reporter at Sioux Falls Regional said demand was light and activity slow—few packer buyers present—for the high quality grading steers and heifers, offered in a fair weighing condition. All told, 434 head of Ch 2-3 steers weighing an average of 1,431 brought $101.34.
Lower Corn futures continued to support Feeder Cattle futures Wednesday, while apparently continued queasiness over demand and supply-side logistics helped apply some pressure to front-month Live Cattle.
Live Cattle futures closed mixed but mostly higher, from 2¢ to 75¢ lower in three contracts to an average of 47¢ higher.
Feeder Cattle futures closed an average of $1.16 higher.
Wholesale beef values were steady on Choice and sharply lower on Select with light demand and offerings, according to the Agricultural Marketing Service.
Choice boxed beef cutout value was 1¢ lower Wednesday afternoon at $230.65/cwt. Select was $2.67 lower at $208.95.
Corn futures closed 2¢ to 3¢ lower through May ‘20 and then mostly fractionally mixed.
Soybean futures closed 6¢ to 7¢ higher through Aug ’20 and then mostly 3¢ to 4¢ higher.
Major U.S. financial indices closed sharply higher Wednesday, basically erasing losses from the previous session. Primary support, according to many analysts, was the easing of political tensions in Hong Kong, which is thought to be favorable for U.S.-China trade talks.
The Dow Jones Industrial Average closed 237 points higher. The S&P 500 closed 31 points higher. The NASDAQ was up 102 points.
Less cow slaughter and lighter dressed cow weights continue to boost cull cow prices, says David Anderson, Extension livestock economist at Texas A&M University, in the latest issue of In the Cattle Markets.
“Prices in the Southern Plains reached their high of the year, so far, at $54.36/cwt. at the end of August,” Anderson says. “That was 12.5% higher than a year ago. There is some good reason to think that prices may continue to be above a year ago.”
After increased dairy slaughter drove total cattle slaughter to multi-decade highs during the first few months of the year, Anderson explains it moderated and was 1% less year-to-year over the last month.
Likewise, he points out beef cow slaughter was 1% less year over year for the last two months.
“Beef cow culling typically hits its seasonal peak for the year in the Fall. It’s likely some earlier culling this year may have pulled some cows ahead into slaughter,” Anderson says. “Growing dry conditions in the Southern Plains have likely not added to culling numbers, yet.”
Total cow slaughter was 0.5% less over the last two months, compared to the same time last year, according to Anderson.
At the same time, he explains cow dressed weights averaged 7.6 lbs. less so far in 2019, compared to a year earlier.
“So, not only have fewer gone to market, but they have weighed less, as well,” Anderson says. “The overall effect has been less cow beef production in recent weeks, supporting the 90% lean fresh beef price, the wholesale cutout value, and the cull cow price.”