Cash fed cattle prices at yesterday’s weekly Fed Cattle Exchange Auction held mostly steady with the previous week’s country trade on current delivery. Of the 2,067 head offered, 1,257 head sold, mostly steers and mostly from the Southern Plains. The weighted average price was $132.24/cwt. for delivery at 1-9 days; the price last week was $132.54. The weighted average price this week for delivery at 1-17 days was $132.06; $128.30 for delivery at 17-30 days.
Cattle futures gained some traction as fundamentals seemed to win the race, although Live Cattle continues to maintain the steep discount to cash. The ongoing rally in front-month Lean Hog futures likely helped, too.
Live Cattle futures closed an average of $1.48 higher for a range of $1.12 to $1.85 higher.
Feeder Cattle futures closed an average of $1.89 higher for a range of $1.05 to $2.65 higher.
Wholesale beef values continued strong, with chatter about packers needing and wanting to restock following Memorial Day. Choice boxed beef cutout value was 29¢ higher Wednesday afternoon at $245.54/cwt. Select was $1.27 lower at $218.18.
Major U.S. financial indices edged lower on Wednesday. There seemed to be no overwhelming reason. Lower oil prices were likely part of it, as well as ongoing anxiety over lethargic domestic economic growth. For instance the Beige Book released by the Federal Reserve on Wednesday chronicles the ongoing slow pace of inflation.
According to that report, from early April to Late May, “Rapidly rising costs for lumber, steel, and other commodities tended to push input costs higher for some manufacturers and the construction sector, but, some Districts noted falling prices for certain final goods, including groceries, apparel, and autos. Energy prices and farm prices were mixed across products and among Districts.”
The Dow Jones Industrial Average closed 20 points lower. The S&P 500 closed 1 point lower. The NASDAQ closed 4 points lower.
According to David Anderson, Extension economist with Texas A&M University, “Steer weights are a full 30 lbs. below weights of a year ago—that was earlier this month.
In the latest issue of In the Cattle Markets, Anderson explains that both the ongoing incentive for cattle feeders to pull cattle forward, as well as the late winter storms, helped pressure carcass weights.
The result, Anderson says, is much tighter total beef supplies than implied by the number of cattle.