Cattle Current Podcast—March 16, 2023

Too many black swans in too little time tends to make folks cautious. That seems to be as apt an explanation as any for eroding Cattle futures and then cash fed cattle prices in the face of such positive market fundamentals.

In this case, the next feared black swan appears to be a potential contagion of bank failures. Silcon Valley Bank failed last week. Signal bank followed suit quickly after — the third largest bank failure in U.S. history, according to various sources. Then came speculation/news yesterday that Credit Suisse, across the pond, was on the ropes with its largest investor unwilling to provide more funding.

Major U.S. financial indices fell sharply before regaining some lost ground later yesterday when the Swiss Financial Market Supervisory Authority (FINMA) and Swiss National Bank (SNB) — the nation’s central bank — issued a joint statement, saying in part: “The Swiss Financial Market Supervisory Authority (FINMA) and the Swiss National Bank assert that the problems of certain banks in the USA do not pose a direct risk of contagion for the Swiss financial markets … In addition, the SNB will provide liquidity to the globally active bank if necessary.”

By the time the statement was issued, the die was cast for Cattle futures.

Feeder Cattle futures closed an average of $2.04 lower.

Live Cattle futures closed an average of $1.15 lower.

Corn futures closed mostly 2¢ lower.

KC HRW Wheat closed fractionally higher to 2¢ higher.

Soybean futures closed mostly 12¢ to 13¢ lower.

Negotiated cash fed cattle trade ranged from limited on moderate demand in the Southern Plains to moderate on moderate demand in Nebraska to light on moderate demand through Wednesday afternoon, according to the Agricultural Marketing Service.

So far this week, live prices are mainly $1 lower at $164/cwt. in the Southern Plain and Nebraska, where dressed sales were $1 lower at $264.

Although too few to trend, there have been some sales in the western Corn Belt at $164.00-$164.50 on a live basis and $263-$264 in the beef. Prices there last week were $164-$167 and $265, respectively.

Choice boxed beef cutout value was $1.64 lower Wednesday afternoon at $284.27/cwt. Select was $1.93 lower at $272.63/cwt.