Daily-May 31

Daily-May 31

Cattle futures regained some stability on Tuesday, following run-on pressure early from the previous session’s sharp decline. Short covering appeared to be a primary driver, with Feeder Cattle leading; those contracts gained back about half of Friday’s losses.

Live Cattle futures closed an average of 78¢ higher (27¢ to $1.42 higher).

Feeder Cattle futures closed an average of $2.07 higher ($1.37 to $2.97 higher).

Corn futures closed mostly 4¢ to 6¢ lower.

Choice boxed beef cutout value was 35¢ lower Tuesday afternoon at $245.25/cwt. Select was $1.00 higher at $219.45.

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Major U.S. financial indices trended lower on Monday, amid mixed economic news. Among data investors absorbed:

Personal Income and Personal Disposable Income grew at 0.4% in April, according to the U.S. Bureau of Economic Analysis. That was in line with expectations, but continues to speak to trudging economic growth.

The Dow Jones Industrial Average closed 50 points lower. The S&P 500 closed 2 points lower. The NASDAQ closed 7 points lower.

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“Slowly growing feedlot inventories reflect the increase in feeder supplies resulting from three years of herd expansion,” says Derell Peel, Extension livestock marketing specialist at Oklahoma State University, in his latest weekly market comments. “The May 1 on-feed inventory is the highest monthly cattle on feed total since February of 2013 and the highest May total since 2012.”

Among the regional highlights Peel gleaned from Friday’s monthly Cattle on Feed report:

  • While Texas remains the largest cattle feeding state, Peel says feedlot inventories there haven’t grown very fast in recent months. The May 1 inventory was unchanged from last month and was 1.2% lower than last year. According to Peel, current Texas feedlot numbers are 20.1% lower than the all-time monthly inventory peak of 3.08 million head that occurred in February/March of 2001.
  • Like Texas, Peel says the inventory has also grown at a slow pace in Nebraska, which is the second largest cattle feeding state. Although, he adds that Nebraska continues to close the gap with Texas in terms of monthly on-feed inventory.
  • On the other end of regional growth, Peel says, feedlot inventories in Kansas (the No. 3 cattle feeding state) have grown aggressively in recent months. He explains, “The current Kansas feedlot inventory of 2.28 million head is 6% more than last year and is the highest monthly total for the state since December of 2011.”
  • “Colorado (the No.4 cattle feeding state) has also grown rapidly in the past few months,” Peel says. “The May 1 inventory there is 6.7% higher than last year and is the largest monthly total for the state since April, 2013.”
  • Then there is Iowa, the No. 5 cattle feeding state in terms of on-feed inventory. Peel notes that feedlot inventories there have grown rapidly in the past six months with monthly placements averaging nearly 20% higher year over year. Peel explains, “This is the fastest growth in placements among the top five feedlot states and has pushed the current Iowa cattle-on-feed inventory to a record high for the data series going back to 1992.”
2017-05-30T20:12:36+00:00

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