Cattle futures weakened further Monday, along with other commodities and financial markets as fears about a contracting economy, high unabated inflation and increasing interest rates ruled the day.
Feeder Cattle futures closed an average of $1.75 lower ($1.20 lower toward the front to $2.40 lower in the back contract.
Live Cattle futures closed an average of $1.32 lower (77¢ to $1.70 lower).
Negotiated cash fed cattle trade ranged from mostly inactive on very light demand to a standstill through Monday afternoon, according to the Agricultural Marketing Service.
Last week, live prices were $143/cwt. in the Southern Plains, $144-$145 in Nebraska and $145-$148 in the western Corn Belt. Dressed prices were $228-$232 in Nebraska and $227-$243 in the western Corn Belt.
Choice boxed beef cutout value was 79¢ lower Monday afternoon at $247.84/cwt. Select was $4.04 higher at $223.35.
Corn futures closed 8¢ to 11¢ lower through Sep ’23 and then mostly 5¢ lower.
Soybean futures closed mostly 11¢ to 15¢ lower.
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Major U.S. financial indices closed sharply lower again Monday with the surging dollar and continued worries about climbing interest rates and recessionary fears.
The Dow Jones Industrial Average closed 329 points lower. The S&P 500 closed 38 points lower. The NASDAQ was down 65 points.
West Texas Intermediate Crude Oil futures (CME) closed $2.03 to $2.14 lower through the front six contracts.
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“Both feedlot inventories and cattle slaughter have remained stubbornly high this year due to drought-forced movement of cattle out of the country. Total fed cattle slaughter thus far in 2022 is up 0.8% as the 1.7% decrease in steer slaughter for the year to date is offset by a 4.9% increase in heifer slaughter,” says Derrell Peel, Extension livestock marketing specialist at Oklahoma State University, in his weekly market comments. “Total cow slaughter is up 5.6% so far this year, driven by a 13.4% increase year over year in beef cow slaughter. Total cattle slaughter is up 1.8% year over year thus far in 2022, with female (cow plus heifer slaughter) accounting for 50.9% of total cattle this year. Cattle slaughter and beef production are projected to decrease year over year in the fourth quarter but higher than expected beef production in the first three quarters of the year likely mean that annual totals for beef production will be steady or fractionally higher year over year. Feedlot production, cattle slaughter and beef production are all expected to decrease sharply in 2023.”
Referencing Friday’s Cattle on Feed report, Peel explains, feedlot inventories grow seasonally in the fall but are expected to increase less this year and trail last year’s record levels.
“In the past four months — May – August — total placements were down 0.6% year over year with placements under 700 lbs. up 5.3% and placements over 700 pounds down 3.7% compared to last year. Past placements of lightweight cattle suggest fewer cattle available for placement going forward,” Peel says.