Cattle feeder confidence paid off in the Southern Plains on Thursday as packers paid $2 more than last week on a live basis at $111/cwt. There was too little trade for a trend in other regions through the afternoon.
Cattle futures lost ground on Thursday. Although the bounce higher in grains likely provided some pressure, more than anything, it had the feel of modest positioning and correcting rather than anything bearish.
Live Cattle futures closed an average of 96¢ lower (62¢ to $1.42 lower).
Other than 60¢ and 37¢ lower at either end of the board, Feeder Cattle futures closed an average of $2.01 lower ($1.12 to $2.42 lower).
Choice boxed beef cutout value was $1.12 higher Thursday afternoon at $197.44/cwt. Select was 69¢ higher at $189.45.
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Major U.S. financial indices edged lower on Thursday, running out of early steam with sharp pressure in oil prices; though lower on the day, Crude Oil (WTI) recovered some ground by session end.
The Dow Jones Industrial Average closed 31 points lower. The S&P 500 closed 4 points lower. The NASDAQ closed 12 points lower.
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Forecast total red meat and production for this year was raised to 100.6 billion lbs. in the latest World Agricultural Supply and Demand Estimates (WASDE), with increased broiler and turkey production offsetting estimated reductions in beef and pork production.
“Beef production is reduced from the previous month largely due to lower expected fourth-quarter carcass weights,” say analysts with USDA’s Economic Research Service (ERS). “Beef production is little changed from last month, although first-half production is lowered as pasture conditions are expected to slow the pace of placements in the latter part of 2017. However, heavier carcass weights are expected to offset a portion of the decline.”
ERS estimates beef production this year at 26.5 billion lbs.; 27.3 billion lbs. next year.
The fourth-quarter steer price is estimated at $108-$112/cwt. Average for this year is projected at $119.55. Prices for the first quarter of next year are projected at $111-$119; $109-$119 in the second quarter; average 2018 annual of $111-$120.