Cattle futures gapped lower Monday with apparent nervousness about the inability of boxed beef prices to catch a strong seasonal grip and chatter about declining long fund positions.
Feeder Cattle futures closed an average of $3.39 lower.
Live Cattle futures closed an average of $2.64 lower.
Negotiated cash fed cattle trade was at a standstill in all major cattle feeding regions through Monday afternoon, according to the Agricultural Marketing Service.
Last week, FOB live prices were steady to $1 higher in the Southern Plains at $185/cwt., Prices in the North were also $185, at the upwards end of the previous week’s trading range. Dressed delivered prices were $2 higher at $292.
Choice boxed beef cutout value was 62¢ lower Monday afternoon at $301.72/cwt. Select was $1.65 lower at $270.36/cwt.
Turning to row crops, Soybean futures closed 11¢ to 13¢ higher through Aug ‘24 Monday with follow-through support from bearish weather forecasts in South America.
Corn futures closed mostly unchanged to fractionally higher.
KC HRW Wheat closed mostly 1¢ to 2¢ higher.
Major U.S. financial indices edged higher Monday with follow-through support from last week’s steamy gains.
The Dow Jones Industrial Average closed 34 points higher. The S&P 500 closed 7 points higher. The NASDAQ was up 40 points.
West Texas Intermediate Crude Oil futures (CME) closed 31¢ to 63¢ higher through the front six contracts.
Domestic consumer beef demand continues strong despite historically high prices.
In fact, Derrell Peel, Extension livestock marketing specialist at Oklahoma State University says post-pandemic beef demand has been exceptional since 2021 with per capita beef consumption last year of 58.9 pounds, which was equal to 2021.
Moreover, in his weekly market comments, Peel points out inflation-adjusted retail all-fresh beef prices were record high in 2021 and just slightly lower in 2022. By way of comparison, he notes the all-fresh beef price in 2015 was similar to 2021-22 but per capita beef consumption back then was 8.3% less at 54.0 pounds.
So far this year, Peel says retail all-fresh beef prices continue increasing and reached a new record monthly high in September at $7.82 per pound.
“There are certainly plenty of macroeconomic and geopolitical uncertainties to keep the industry nervous about beef demand,” Peel says. “However, the increasingly high quality and consumer preferences for beef continue to be reflected in strong beef demand. These factors, combined with tightening beef supplies, will keep wholesale and retail beef prices strongly supported in the coming months.”