Early hopes for higher cattle prices in 2021 have taken a bearish turn the past month, hit by rising corn prices and a lethargic packer response to higher boxed beef prices. Tuesday's trade saw futures contracts of live cattle and feeders fall to new lows. July corn closed up 17 1/4 cents at $6.96 3/4 per bushel and July soybean meal closed up $6.40. The Dow Jones Industrial Average is trading up 19.80 points.
June cattle fell $2.27 to $113.02 Tuesday, the lowest close since the first day of 2021, pressured by rising feed grain costs and lethargic packer demand for cash cattle. August cattle closed down $1.72 at $116.62 and December was down 90 cents. Cash trade was fairly active for a Tuesday, reported at $119 live in Kansas and Texas; $118 in Nebraska. Dressed business was also seen in Nebraska at $190, steady with last week. Asking prices are at $120 in the South and $192 in the North.
Late Monday, USDA reported comprehensive boxed beef movement of 6,497 loads for a cutout value at $281.97, the highest value since last year's panicked pandemic market. Tuesday's slaughter was estimated at 121,000, up from Monday and the same as a week ago. While slaughter has been lower recently and the restrained response of boxed beef movement appears to be deliberate, some may argue the limited movement results from a combination of new safety procedures and a reluctant labor force at processing plants. Either way, the result is that the slow delivery of beef to a lucrative retail market is depressing cash cattle prices in the country and pushing ranchers to the boiling point of frustration at a time when feed costs are rising painfully higher.
Tuesday's choice boxed beef prices were higher in the morning and finished up $1.92 at $301.22. Selects were up 12 cents at $283.91. Load counts totaled 130.
WEDNESDAY'S CASH CATTLE CALL: Steady to lower. With so many headwinds, it has become difficult for cattle prices to sustain a rally and noncommercials were likely liquidating on Tuesday's new lows.
August feeder cattle dropped $3.62 to $143.17 Tuesday, the lowest close in five months. May corn has yet to see any contracts delivered and closed up 12 1/2 cents at $7.44 3/4 Tuesday, the highest May close in over eight years. Much of the Corn Belt is covered with cash corn bids of $7 or higher. Bids above $8 are seen around the Texas Panhandle. The latest push in corn is coming from hot and dry conditions in Brazil, another bullish layer that started a long time ago with larger-than-expected demand from China. The CME Feeder Cattle Index was up 13 cents Monday to $132.76.
June hogs traded both sides of Monday's close and finished up 90 cents at another new contract high of $113.55. That is the highest June price hogs have seen since 2014, driven by a strong rebound in retail demand from last year and fewer hogs in 2021. New contract highs were also seen in subsequent months with the December contract closing up 47 cents at a new high of $83.02. Negotiated cash hogs on the National Direct Afternoon, closed up $3.53 with a weighted average of $115.20 on 9,022 head. The national pork market formula posted a weighted average of $106.16 on 146,997 head. Pork cutout values were down 48 cents Tuesday to $111.18 on 428.30 loads. Tuesday's slaughter was estimated at 487,000 head, up from 486,000 a week ago. The CME Lean Hog Index was estimated at $107.37 for Monday, up 27 cents from Friday.
WEDNESDAY'S CASH HOG CALL: Steady. Cash prices remain well-supported in the current market while the slaughter pace is likely restrained by a difficulty finding more hogs.