Live sales last week ended up mostly $3 higher at $123/cwt.; $2-$3 higher in the Western Corn Belt at $122-$123. Dressed trade was $4-$5 higher at $194-$195.
Higher cash fed cattle trade, along with firming wholesale beef values helped fuel strong buyer support for Cattle futures on Tuesday.
Choice boxed beef cutout value was $2.24 higher on Tuesday afternoon at $205.14/cwt. Select was $3.59 higher at $196.57.
Except for 22¢ higher in recently minted away Jun, Live Cattle futures closed an average of $1.71 higher ($1.42 to $1.92 higher).
Feeder Cattle futures closed an average of $3.35 higher ($2.07 to $4.20 higher).
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Major U.S. financial indices closed sharply higher on Tuesday amid general overall optimism.
The Dow Jones Industrial Average closed 104 points higher. The S&P 500 closed 22 points higher. The NASDAQ closed 103 points higher.
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“Domestic and international beef demand will determine cattle and beef price pressure relative to increasing beef production,” says Derrell Peel, of markets in 2018. “Modest price pressure is expected at this time but any threat to demand would quickly result in additional price weakness. Larger down-side price risk means that risk management takes on an added importance in 2018. While cattle producers cannot have much impact on overall market price levels, they may be able to reduce the risk of lower individual prices with risk management tools.”
Peel, the Extension livestock marketing specialist at Oklahoma State University says decent returns will be possible this year despite the likely squeeze on profits.
“Lower prices increase the likelihood of lower revenue and puts additional emphasis on production and cost management in the coming year,” Peel says. “Overall production costs are expected to remain stable in 2018, though rising interest rates may impact debt management at some point. Maintaining profitability this year in the face of lower prices will require increased production and/or reduced costs.”