Cattle futures rebounded Wednesday with thoughts of steady to higher cash fed cattle prices this week and perhaps some early positioning ahead of Friday’s monthly Cattle on Feed report.
Feeder Cattle futures closed an average of $1.48 higher (55¢ to $2.20 higher).
Live Cattle futures closed an average of $1.08 higher (76¢ to $1.37 higher).
Negotiated cash fed cattle trade ranged from slow on light demand to a standstill through Wednesday afternoon, according to the Agricultural Marketing Service. Although too few to trend, there were a few live trades in Nebraska at $186/cwt.
Last week, FOB live prices were $182-$183/cwt. in the Southern Plains, $184-$185 in Nebraska and $185 in the western Corn Belt. Dressed delivered prices were $292.
Choice boxed beef cutout value was 86¢ lower Wednesday at $301.26/cwt. Select was $3.10 lower at $278.68/cwt.
Corn futures closed mostly 4¢ to 6¢ higher Wednesday, bolstered by trade worries over a commercial cargo vessel in the Black Sea running into a mine.
KC HRW Wheat closed fractionally lower to 2¢ lower through May ‘24 and then fractionally higher to 1¢ higher.
Soybean futures closed 4¢ to 9¢ higher.
Major U.S. financial indices eased lower Wednesday. Primary news for the day was the Fed’s decision to leave interest rates unchanged for now, as widely anticipated, but with indications of another increase coming yet this year.
The Dow Jones Industrial Average closed 76 points lower. The S&P 500 closed 41 points lower. The NASDAQ was down 209 points.
West Texas Intermediate Crude Oil futures (CME) closed 79¢ to 92¢ lower through the front six contracts.
Declining beef cow slaughter is helping support 90%-lean beef prices at levels 17.3% higher than last year, says Derrell Peel, Extension livestock marketing specialist at Oklahoma State University, in his weekly marketing comments.
For perspective on cow numbers, Peel explains beef cow slaughter is falling in the second half of this year after increasing annually from 2015 through 2022 and may end up 15-17% less for the year.
With the related higher cull cow prices in mind, Peel advises producers to keep value factors in mind as they make culling decisions this fall.
“As a rough guide, cows will be about 100 pounds heavier for increases in each grade from Lean to Boner to Breaker. Each grade increase is roughly equivalent to an increase of one body condition score,” Peel says. “Additionally, the live weight of cows will change by roughly 25-30 pounds above and below the weight of average dressing cows for high and low dressing cows. Producers can often impact the value of cull cows by managing the weight and condition of cows before marketing.”
For instance, Peel explains cull cows that are thin (Lean, low dressing) in the fall and are retained and fed until spring may sell as Boner cows at average dressing by March with an increase in value of $400-$600/head due to added weight, grade, and condition.
“Of course, the feasibility of holding cull cows depends on time and management considerations and the availability of surplus feed,” Peel says. “Going forward, many culled cows will likely be screened for the possibility of producing another calf and selling later for slaughter value. Leaving the cull cows with a bull while adding weight after weaning may produce another increment of added value if she can be sold as a bred cow next spring at seasonally high bred cow prices.”