Cattle futures overcame more government intervention in the cattle business (see below) on Monday to eke out gains with oversold conditions.
Toward the close, Live Cattle futures were an average of 73¢ higher. Feeder Cattle futures were an average of 25¢ higher except for an average of $1.07 lower in the back two contracts.
Negotiated cash fed cattle trade was mostly inactive on light demand in the North through Monday afternoon, according to the Agricultural Marketing Service. Last week, FOB live prices were $218-$222/cwt., which was $4-$7 lower in Nebraska and $3-$7 lower in the western Corn Belt. Dressed delivered prices were mostly $345, which was $10-$11 lower.
Last week’s weighted average five-area direct FOB live fed steer price was $5.76 lower at $219.25. The weighted average dressed delivered fed steer price was $10.12 lower at $345.42.
Choice boxed beef cutout value was 41¢ lower Monday afternoon at $375.82/cwt. Select was $2.59 lower at $358.49.
Grain and Soybean closed futures were mixed on Monday.
Toward the close and through the front four contracts, Corn futures were mostly fractionally higher to 2¢ higher. Soybean futures were narrowly mixed, from fractionally lower to 1¢ higher. Kansas City HRW Wheat futures were 4¢ to 8¢ lower with likely profit taking.
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Major U.S. financial indices closed lower Monday, as oil prices increased on renewed military strikes between the U.S. and Iran.
The Dow Jones Industrial Average closed 374 points lower. The S&P 500 closed 25 points lower. The NASDAQ was down 31 points.
Through mid-afternoon, West Texas Intermediate Crude Oil futures (CME) were $1.41 to $2.77 higher through the front six contracts.
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Agriculture Secretary, Brooke Rollins, announced the Ranchers First Initiative on Monday. Best as I can tell, among fictional statements and political hyperbole, it includes an initiative to provide price protection of breeding heifers through the Livestock Risk Protection program, allows producers to use the Emergency Conservation Program (ECP) on Grassland Conservation Reserve Program (CRP) acres and promotes programs aimed at supporting local and regional meat processing facilities.
There could be some positives in the array, but likely none as helpful as the government simply allowing the market to work … unimpeded.
“Adverse weather conditions combined with a barrage of news and uncertainty are keeping cattle markets down for the time being,” says Derrell Peel, Extension livestock marketing Specialist at Oklahoma State University, in his weekly market comments. “Fed and feeder cattle prices will likely recover significantly if politicians will shut up and stop proposing actions that will not help cattle producers or beef consumers, in either the short run or the long run. Ever tighter cattle supplies and continued strong beef demand will reassert market fundamentals at some point.”
Peel notes the historically low feedlot placements and marketings in the last Cattle on Feed report will continue to decrease further going forward.
“Despite limited signs of heifer retention, poor production conditions and tremendous uncertainty due to a whirlwind of political rhetoric and industry dynamics suggest that no herd rebuilding is likely for the foreseeable future,” Peel says. “Probably the best we can hope for is data that confirms that the liquidation has stopped.”