Cattle Current Daily—Sept. 22, 2021

Cattle Current Daily—Sept. 22, 2021

Negotiated cash fed cattle trade was at a standstill in the Southern Plains and Western Corn Belt through Tuesday afternoon, according to the Agricultural Marketing Service. In Nebraska, trading was mostly inactive with very light demand and not enough purchases to trend.

Last week in the Texas Panhandle, live sales traded at $124/cwt. In Kansas, live sales traded from $123-$124. In Nebraska, live sales traded at $124 and dressed mostly at 200. In the Western Corn Belt, live sales traded from $123-$124 and dressed at $196-$200.

Cattle futures mostly firmed Tuesday, despite continued pressure in Lean Hogs, tied to queasiness over China’s economic growth. After the bell, USDA announced confirmation of African Swine Fever in Haiti, which shares an island with the Dominican Republic, where it was recently confirmed.

Feeder Cattle futures closed an average of 48¢ higher, except for an average of 7¢ lower in the front two contracts.

Live Cattle futures closed an average of 38¢ higher, except for an average of 22¢ lower in the front three contracts.

Choice boxed beef cutout value was $4.29 lower Tuesday afternoon at $311.37/cwt. Select was $2.74 lower at $278.01.

Corn futures closed mostly 2¢ to 4¢ lower.

Soybean futures closed mostly 9¢ to 11¢ higher.

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Major U.S. financial indices retained most of the previous session’s steep losses on Tuesday as investors awaited the Fed’s quarterly economic outlook and interest rate notions.

The Dow Jones Industrial Average closed 51 points lower. The S&P 500 closed 4 points lower. The NASDAQ was up 33 points.

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The venerable cattle cycle is alive and well. Derrell Peel, Extension livestock marketing specialist at Oklahoma State University provides insight to the systematic ebb and flow of the U.S. beef cattle inventory.

“Cattle cycles continue to be a regular feature of the industry for several reasons,” Peel explains, in his latest weekly market comments. “It takes rather exaggerated price signals to encourage the cow-calf sector to change course and the lengthy biology of cattle production makes changing course a slow process. Perhaps most important is the interaction between production and reproduction in the cattle industry. Since cattle have offspring one at a time, the process of expanding production when inventories are too low means that tight supplies are made even tighter to retain heifers for increased production and likewise too much supply is made even larger in the short run as more cows are culled and fewer heifers are retained for production.”

Peel points out the most recent cyclical expansion from 2014 to 2019 was the first significant one since 1990 to 1996. 

“A muted cycle from 2004 to 2007 resulted in very little expansion before more liquidation to 2014.  Cattle inventories declined 15 of 18 years from 1996 to 2014,” Peel explains. “The most recent cattle cycle began with an inventory low of 88.24 million head in 2014 with cattle numbers increasing to 94.8 million head in 2019. Modest cyclical liquidation in 2019 and 2020 brought cattle inventories down to 93.6 million head in January 2021. Herd liquidation is being exaggerated by drought in 2021. It is not clear exactly how much and how fast the industry will liquidate going forward but cattle cycles continue to be an important fundamental feature affecting cattle markets in the U.S.”

2021-09-21T20:20:43-06:00

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