Cattle futures closed mainly lower Tuesday, pressured in part by the lack of cash direction for fed cattle and firmer nearby Corn futures.
Feeder Cattle futures closed an average of 71¢ lower (32¢ to $1.32 lower).
Live Cattle futures closed an average of 40¢ lower, except for an average of 24¢ higher in the back two contracts.
Corn futures gained Tuesday, with support from further erosion in Argentina’s crop.
Corn futures closed mostly 1¢ to 2¢ higher.
KC HRW Wheat closed mostly 9¢ to 17¢ higher.
Negotiated cash fed cattle trade ranged from mostly inactive on very light demand to a standstill through Tuesday afternoon, according to the Agricultural Marketing Service.
Last week, live prices were $164-$167/cwt. but mostly $165. Dressed prices were $265.
Choice boxed beef cutout value was $1.05 higher Tuesday afternoon at $285.91/cwt. Select was 94¢ higher at $274.56/cwt.
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Major U.S. financial indices closed higher Tuesday, finding some footing after the recent selloff due to the closure of Silcon Valley Bank. Support included the monthly Consumer Price Index meeting trader expectations.
The Consumer Price Index for All Urban Consumers (CPI-U) rose 0.4% in February on a seasonally adjusted basis, after increasing 0.5% in January, according to the U.S. Bureau of Labor Statistics. Over the last 12 months, the all items index increased 6.0% before seasonal adjustment, which was the smallest 12-month increase since the period ending September 2021.
The Dow Jones Industrial Average closed 336 points higher. The S&P 500 closed 63 points higher. The NASDAQ was up 239 points.
West Texas Intermediate Crude Oil futures (CME) closed $3.16 to $3.47 lower through the front six contracts, with continued pressure from worries that banking woes will further slow economic growth.
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USDA’s Economic Research Service (ERS) increased expected average feeder steer prices (basis 750-800 lbs., Oklahoma City) by $1 in the first quarter to $183/cwt. and by $1 in the second quarter to $193, in the March Livestock, Dairy and Poultry Outlook. Prices are forecast at $214 in the third quarter and $224 in the fourth quarter for an annual average of $204, which would eclipse the record-high average of 2014.
“The outlook for feeder calf prices is improved, given existing tight supplies of cattle, a projection for lower market-year average corn prices, and higher expected fed cattle prices, as well as recent price data,” according to ERS analysts.
As mentioned recently in Cattle Current, ERS forecast the annual average weighted average five-area direct fed steer price at $162/cwt. Support includes historically high seasonal composite boxed beef cutout values, underpinned by declining cattle numbers and lighter winter carcass weights.
“For the week ending February 18, steer and heifer carcass weights were lower by 15 and 21 pounds, respectively, from the same period last year,” ERS analysts say. “Further, cow and bull carcass weights are down 10 and 30 pounds, respectively. The anticipated share of cows in the slaughter mix is raised in 2023, which will contribute to lighter expected average carcass weights. The results have lowered the outlook for cattle weights the rest of year.”