Cattle futures trended lower on Friday with apparent position squaring and profit taking, and without direction from the cash fed cattle market.
There were too few cash fed cattle trades to trend through Friday afternoon. According to the AMS Cattle Dashboard, 1,036 head were reported on Friday with steers selling for $121.31/cwt. on a live basis and at $193 in the beef.
Similarly, the Texas Cattle Feeders Association reported its members trading steers about $2 higher than the previous week at $122.04 and heifers about $3 higher at $123.
The previous week, live trade was at $120/cwt. in all major cattle feeding regions. Dressed trade was at $192 in Nebraska and the western Corn Belt.
Lack of cash direction helped Cattle futures drift lower on Friday, along with profit taking and position squaring.
Live Cattle futures closed an average of 41¢ lower (from 5¢ lower in spot Feb to 75¢ lower).
Except for 35¢ lower in the back contract, Feeder Cattle futures closed an average of $1.22 lower.
Choice boxed beef cutout value was 83¢ lower on Friday afternoon at $204.86/cwt. Select 71¢ lower at $200.16.
A wildcard heading into this week will be the government shutdown, if it continues: the overall impact of market reaction, as well as the absence of data provided by the Agricultural Marketing Service.
*****************************
Major U.S. financial indices closed higher on Friday, even as Congress had yet to pass a spending bill or stopgap measure to prevent the government shutdown that began after midnight on Friday.
The Dow Jones Industrial Average closed 53 points higher. The S&P 500 closed 12 points higher. The NASDAQ closed 40 points higher.
****************************
JBS USA announced last week that that it entered an agreement to sell its Five Rivers Cattle Feeding assets to affiliates of Pinnacle Asset Management, L.P. for approximately $200 million in U.S. dollars.
Five Rivers, the world’s largest cattle feeding operation has a one-time capacity of more than 900,000 head—close to a million head depending on who you talk to. Pinnacle Asset Management is a commodities and natural resources investment firm.
The transaction includes 11 feedyards in six states and a long-term agreement for Five Rivers to supply cattle to JBS USA beef processing plants. The current Five Rivers management team will remain in place.
A press statement last week indicated that Five Rivers will continue to operate as usual, including the purchasing of cattle and commodities in the ordinary course of business, until the closure of the transaction. In addition, JBS USA will continue agreements to purchase cattle from feedyards associated with Five Rivers Cattle Feeding operations.
Completion of the acquisition is subject to U.S. regulatory review and approval, approval from the JBS S.A. Board of Directors, and subject to Pinnacle Asset Management, L.P. securing the relevant funding.