Early indications point to higher cash fed cattle once again this week as packers and retailers reload after the holidays.
Slaughter steers traded $2 higher at Sioux Falls Regional Livestock in South Dakota on Wednesday. Slaughter heifers sold $1-$2 higher. There were only 388 head offered in the weekly Fed Cattle Exchange Auction and no sales.
Wholesale beef prices continue to offer support.
Choice boxed beef cutout value was $3.48 higher on Wednesday afternoon at $208.62/cwt. That’s $5.72 higher in the last two days. Select was $2.59 higher at $199.16; up $6.18 in the last two days.
That and sluggish trade helped Cattle futures retain most of the strong gains in the previous session.
Live Cattle futures closed narrowly mixed but mostly higher (40¢ lower to 27¢ higher).
Feeder Cattle futures also closed narrowly mixed but mostly higher (15¢ lower to 45¢ higher).
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Major U.S. financial indices closed higher again on Wednesday amid supportive economic news that included the Fed being more optimistic about the domestic economy.
The Dow Jones Industrial Average closed 98 points higher. The S&P 500 closed 16 points higher and above 2700 for the first time. The NASDAQ closed 58 points higher.
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Fed steer prices climbed the most since September in 11 years, according to the Livestock Marketing Information Center (LMIC), in the latest Livestock Monitor.
Based on the 5-market Choice steer price monthly average (USDA AMS), October prices were up $5.35/cwt. from the prior month, according to LMIC. In 2013, analysts there note that the September-to-October increase was $5.13; it was $4.44 in 2014.
“Over the last 10 years, the average September-to-October price change was a decline of 16 cents, in no small part due to drops in 2015 and 2016 of $4.45 and $5.03, respectively,” LMIC analysts say. “The comparisons of fed cattle price increases in 2017 from September to November were even more dramatic. The average change for that two-month span during the prior 11 years was up by $1.42 per cwt. This year the price increase was $14.26.”
For the quarter, LMIC analysts project the average fed steer price at a little more than $117.50/cwt.. which would be 9% more than last year.