Cattle futures closed sharply higher on Tuesday, led by Feeder Cattle and supported by some traction in wholesale beef values, as well as the steady to slightly higher prices for fed cattle last week. If it holds together, the rally could help set the stage for higher cash fed cattle trade this week.
Live Cattle futures closed an average of $2.31 higher ($1.95 to $2.95 higher).
Feeder Cattle futures closed an average of $3.49 higher ($1.50 to $4.12 higher).
Choice boxed beef cutout value was 88¢ higher Tuesday afternoon at $200.13/cwt. Select was $1.64 higher at $192.69.
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Major U.S. financial indices closed sharply higher on Tuesday, buoyed by strong quarterly earnings reports from the likes of Caterpillar and 3M.
The Dow Jones Industrial Average closed 167 points higher. The S&P 500 closed 4 points higher. The NASDAQ closed 11 points higher.
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“Grass hay values were surprisingly weak in August, mostly due to a 25% price decline in Oklahoma, the third largest non-Alfalfa hay producing state,” say analysts with the Livestock Marketing Information Center (LMIC), in the most recent Livestock Monitor. “Grass hay prices were down 5% in Texas, the largest producer of non-Alfalfa hay. California, Minnesota, and Ohio also recorded double-digit percentage declines in non-Alfalfa hay prices from July to August.”
Until August, LMIC analysts explain hay prices were higher year-over-year on 2% less hay in tandem with the growing cowherd. In the Southern Plains they say favorable pasture conditions in August, coupled with abundant carryover hay supplies began to pressure prices.
“Carryover hay supplies from last year in Oklahoma were at the highest levels since 2008 at the end of April and tripled the inventory on hand in April 2012 when Oklahoma experienced its last drought,” LMIC analysts say. “These large supplies, coupled with favorable weather in August for pastures in Oklahoma put pressure on hay prices even though current year grass hay production is about the same as last year. Also, alfalfa hay production in Oklahoma is up more than 40% from 2016.”