Follow-through buying and commercial interest helped Cattle futures hold on to steep gains from the previous day.
Live Cattle futures closed an average of 36¢ higher.
Feeder Cattle futures closed an average of $1.11 higher (47¢ to $1.65 higher).
When all was said and done last week, cash fed cattle sales were steady to $1 lower at mostly $126/cwt. on a live basis; steady in the beef at $200.
Choice boxed beef cutout value was 50¢ lower on Friday afternoon at $209.10/cwt. Select was $1.09 lower at $203.45.
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Major U.S. financial indices plunged lower on Friday with increasing concerns that inflation and interest rates are rising too quickly. Part of that concern was tied to Friday’s employment report from the U.S. Bureau of Labor Statistics indicating that hourly wages in January were 2.9% higher year over year. That same report says nonfarm payroll employment increased by 200,000 last month, leaving the nation’s unemployment rate at 4.1%.
The Dow Jones Industrial Average closed 665 points lower. The S&P 500 closed 59 points lower. The NASDAQ closed 144 points lower.
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Although cattle numbers continue to grow and total red meat and poultry production is surging, analysts with CattleFax say most in the business will have the chance to be profitable again this year, even as margins narrow. That’s due to beef demand.
At last week’s annual CatleFax Outlook session in Phoenix, senior analyst Kevin Good explained, “Domestically, retail demand is increasing and beef is being featured more in the consumer markets. The retail and foodservice industries are doing very well. He adds that the nation’s solid economy is one of the main drivers as unemployment rates continue to decline and per capita income rises.”
CattleFax projects the average price for feeder steers weighing 750 lbs. at $145/cwt. this year, with a range from the upper $120s to $160. Analysts there peg the average price of steer calves weighing 550 lbs. at $158—from about $170 for the spring high and the $130s in the fall. As for fed cattle, Good said they’re likely to face resistance near the $130 level, with downside risk in the upper $90 range. CattleFax projects the average fed steer price at $115.