Negotiated cash fed cattle trade was mostly inactive on light demand in all major cattle feeding regions through Friday afternoon, according to the Agricultural Marketing Service.
Last week, live prices ended up $3-$4 higher in the Southern Plains at $140/cwt., $2-$4 higher in the Northern Plains at $145 and mostly steady to $4 higher in the western Corn Belt at $140-$146. Dressed prices were $4-$5 higher at $230.
The five-area direct fed steer price through Thursday was $3.21 higher at $143.73. The average steer price in the beef was $3.71 higher at $229.73.
Estimated total cattle slaughter last week of 667,000 head was 7,000 fewer than the previous week but 3,000 head more than the same week last year. Year-to-date total estimated cattle slaughter of 15.58 million head was 156,000 more (+1.0%) than the same period last year. Total estimated year-to-date beef production of 12.92 billion lbs. was 130.5 million lbs. more (+0.8%).
Choice Boxed beef cutout value was 90¢ lower through Friday afternoon at $266.26/cwt. Select was $1.15 higher at $246.53.
Cattle futures continued to gain Friday with the week’s higher cash prices, aggressive fed cattle slaughter and weaker Corn futures.
Feeder Cattle futures closed an average of $1.32 higher (40¢ higher at the back to $1.65 higher in spot Aug).
Live Cattle futures closed an average of 38¢ higher.
Corn futures closed mostly 4¢ to 7¢ lower.
Soybean futures closed mostly 5¢ to 7¢ lower.
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Major U.S. financial indices closed mixed Friday after a volatile back-and-forth session.
The Dow Jones Industrial Average closed 38 points lower. The S&P 500 closed 8 points higher. The NASDAQ was up 152 points.
West Texas Intermediate Crude Oil futures on the CME tumbled Friday, $6.28 to $8.03 lower in the front six contracts, presumably on fears about economic slowdown as central banks around the work raise interest rates and inflation continues unabated.
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“Drought and pasture conditions improved from last month, but the situation is still very poor compared to last year and previous years,” say analysts with USDA’s Economic Research Service, in the recent monthly Livestock, Dairy and Poultry Outlook. They explain, drought and increased input costs are likely much of the impetus behind the 15% year-over-year increase in beef cow slaughter so far this year.
“Based on weekly actual slaughter data reported by the Agricultural Marketing Service through May 28, the pace of beef cow slaughter was almost 10,000 head per week on average above last year for the first four weeks of May,” ERS analysts say. “Based on the pace of beef cow slaughter to date, the anticipated slaughter of beef cows is raised in the second and third quarters of 2022. However, that should leave fewer beef cows available for slaughter in the fourth quarter.”
At the same time, those analysts note weekly fed cattle slaughter is finally back to pre-COVID levels, reducing the need for heavy Saturday slaughter.
“Further, weekday highs have hit thresholds not seen since 2013. Subsequently, it appears that limits to packers’ processing capacity is improving to a point where the fed cattle market is emerging from what may have restricted the market these past two years,” ERS analysts say.