Cattle feeders in the Southern Plains traded fed cattle for $118/cwt. on Tuesday, which was $1 less than last week. Though too few to trend, there were a few live sales reported in Nebraska at $118-$120, steady to $1 lower than last week; a few dressed trades $2 lower at $188.
Choice boxed beef cutout value was $2.45 higher Tuesday afternoon at $206.63/cwt. Select was 60¢ higher at $188.65.
Slightly lower to steady cash fed cattle prices, higher wholesale beef value and short covering ahead of Thanksgiving all helped Cattle futures gain a foothold, at least for a day.
Live Cattle futures closed an average $1.05 higher (47¢ to $1.30 higher).
Except for 35¢ higher in the back contract, Feeder Cattle futures closed an average of $1.69 higher ($1.00 to $2.07 higher).
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Tech stocks led major U.S. financial indices to new record highs on Tuesday. Support also came from stronger than expected quarterly earnings from the likes of Hormel Foods, as well as optimism heading into Black Friday.
The Dow Jones Industrial Average closed 160 points higher. The S&P 500 closed 16 points higher. The NASDAQ closed 71 points higher.
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“Producers should prepare for a good market in 2018 but not an over-the-top market,” says Andrew P. Griffith, agricultural economist at the University of Tennessee, in his weekly market comments.
Griffith notes that calf prices typically start increasing in January before grabbing another gear higher in March and early April. He notes that steer calf prices (500-600 lbs.) last year advanced from $107/cwt. in November to $140-$145 in March, ultimately peaking later than normal in June at $161.
Given current price levels, he doubts the increase from now until March will be as dramatic as last year.
“Significant seasonal price softening has yet to occur in the calf market in the fall of 2017, and there is no indication prices will falter at this point,” Griffith says. “It is always difficult to predict, but a price on these calves in March ranging from $148 to $156 may be as optimistic as it comes at this point. These predictions cannot take into account changes in international policy and trade agreements, nor do they take into account some sudden shock to the market. The point is that the market is unlikely to make as strong of a move as it did one year ago to the upside and the downside risk is very limited moving into the spring.”