Negotiated cash fed cattle trade ranged from slow on light to moderate demand to limited on light demand through Friday afternoon, according to the Agricultural Marketing Service.
For the week, FOB live prices were $1 higher in the Southern Plains at $180/cwt. and steady to $1 lower in the western Corn Belt at $183-$184. Prices in Nebraska the previous week were $182.
Dressed delivered prices were steady to $2 lower in Nebraska at $290 and steady in the western Corn Belt at $290.
Choice boxed beef cutout value was $1.24 higher Friday afternoon at $312.90/cwt. Select was 12¢ lower at $286.05/cwt.
Estimated total cattle slaughter for the holiday-shortened week of 559,000 head was 70,000 head fewer than the previous week and 47,000 head fewer year over year. Year-to-date estimated cattle slaughter of 22.4 million head was 986,000 head fewer (-4.2%) than the same period a year earlier. Estimated year-to-date beef production of 18.3 billion pounds was 964.2 million pounds less (-5.0%).
Cattle futures crept higher Friday, supported by the uptick in cash fed cattle prices and softer Corn futures.
Feeder Cattle futures closed an average of 36¢ higher, except for 22¢ lower in spot Sep.
Live Cattle futures closed an average of 42¢ higher, except for an average of 25¢ lower in the front two contracts.
Corn futures closed mostly 1¢ to 2¢ lower.
KC HRW Wheat closed mostly 4¢ to 5¢ lower.
Soybean futures closed 3¢ to 7¢ higher.
Major U.S. financial indices edged higher Friday, led by recent strength in crude oil.
The Dow Jones Industrial Average closed 75 points higher. The S&P 500 closed 6 points higher. The NASDAQ was up 12 points.
West Texas Intermediate Crude Oil futures (CME) closed 57¢ to 64¢ higher through the front six contracts.
Cash cattle prices are on the cusp of what is typically seasonal weakness, but snug number will likely dilute the impact.
“Cattle prices are trending higher in response to ever tightening cattle and beef supply fundamentals,” says Derrell Peel, Extension livestock marketing specialist at Oklahoma State University is his marketing comments last week. “The beef cow herd on Jan. 1, 2023 was the lowest since 1962 and is still getting smaller. The projected 2023 U.S. calf crop is 2.5 million head smaller than the recent peak in 2018 and leads to an estimated July 1 feeder cattle supply down 3.6% year over year and the smallest since 2017. Feedlot inventories have been smaller year over year since September 2022.”
The last week of August, regional calf and feeder cattle prices were 40% higher year over year with regional steer prices (600-700 pounds) ranging from $68.29/cwt. to $83.30 higher year over year, according to USDA’s National Weekly Feeder & Stocker Cattle Summary.
“Cattle prices have advanced quickly; in some ways faster than expected. The highest cattle prices will occur when herd rebuilding begins in earnest,” Peel explains. “The retention of heifers and reduced cow culling will squeeze feeder cattle supplies, cattle slaughter, and beef production to sharply lower levels. This process has not yet started and is expected to proceed rather slowly when it does begin. Herd rebuilding is expected to take three to four years or more… Cattle prices are expected to average higher through at least 2024 and 2025.”