Cattle futures rallied higher Monday, bolstered by higher cash fed cattle prices at the end of last week, as well as the bullish extended outlook.
Feeder Cattle futures closed an average of $2.16 higher (87¢ higher in spot Sep to $2.65 higher toward the back).
Live Cattle futures closed an average of 95¢ higher amid active trade.
Negotiated cash fed cattle trade was mostly inactive on light demand through Monday afternoon with too few transactions to trend according to the Agricultural Marketing Service.
Last week, FOB live prices were $1 higher in the Southern Plains at $180/cwt., $1-$2 higher in Nebraska at $183-$184 and steady to $1 lower in the western Corn Belt at $183-$184.
Dressed delivered prices were steady to $2 lower in Nebraska at $290 and steady to $2 lower in the western. Corn belt at $288-$290.
The weighted average five-area direct fed steer price last week was 22¢ lower at $182.28/cwt. The average dressed steer price was 91¢ lower at $289.48.
Choice boxed beef cutout value was $2.79 lower Monday afternoon at $310.11/cwt. Select was 61¢ lower at $285.54/cwt.
Corn futures firmed Monday, closing 2¢ to 3¢ higher with positioning ahead of Tuesday’s monthly World Agricultural Supply and Demand Estimates.
Soybean futures closed mostly 5¢ to 7¢ higher.
KC HRW Wheat closed mostly 7¢ to 9¢ lower.
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Major U.S. financial indices closed higher Monday, led by tech stocks.
The Dow Jones Industrial Average closed 87 points higher. The S&P 500 closed 29 points higher. The NASDAQ was up 156 points.
West Texas Intermediate Crude Oil futures (CME) closed narrowly mixed through the front six contracts.
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“Regardless of other fundamentals, the price of replacement female beef animals has moved significantly higher in the last month. These transactions are on the order of 50% higher than this time last year for the same regions,” says Stephen Koontz, agricultural economist at Colorado State University, in a recent issue of In the Cattle Markets from the Livestock Marketing Information Center. “There is not much trade yet and this is a counter-seasonal trade. But there is some evidence of herd building albeit minor.”
In the meantime, Koontz says dwindling cattle numbers and high wholesale beef values make it unlikely for markets to succumb to typical seasonal pressure this fall.
“Boxed beef values are well above $300/cwt and the Choice-Select spread is $25/cwt. These are strong values compared to the current and past year and are also seasonally strong,” Koontz explains. “The crux of the immediate outlook is where will boxed beef values head and how hard will feedlot push? Currently, the feedlot cash return is excellent and has been for the past four months.”