Cattle futures stuttered to a mostly narrowly mixed close to begin the trading week on Tuesday. Last week’s higher cash trade offers optimism, but traders continue to cast a wary eye toward deferred contracts with looming larger supplies.
Live Cattle futures closed marginally mixed, (30¢ lower to 20¢ higher).
Feeder Cattle futures closed mostly narrowly mixed (7¢ to 22¢ higher across the front half of the Board and then 12¢ to 85¢ lower).
Wholesale beef values appear to have rounded the seasonal corner, with a second consecutive day of healthy gains. Choice boxed beef cutout value was $3.35 higher on Tuesday afternoon at $215.92/cwt. Select was $2.97 higher at $210.40.
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Major U.S. financial indices closed mostly sharply lower on Tuesday, with renewed volatility and investors eyeing higher interest rates.
The Dow Jones Industrial Average closed 254 points lower. The S&P 500 closed 15 point lower. The NASDAQ closed 5 points lower.
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“In recent months, the number of cattle placed into U.S. feedlots has been bolstered by the large 2017 calf crop, poor small grains (e.g., wheat) grazing conditions in the Southern Plains and rather good demand for animals to put on-feed,” say analysts with the Livestock Marketing Information Center (LMIC), in the most recent Livestock Monitor. “The spike up in placements is a double-edge sword. In the short term, feeder cattle supplies outside feedlots as of January 1, 2018, were calculated to be below a year earlier (down 2.3% or 607,000 head), which tends to support prices. However, the placement pattern since last fall has put more slaughter cattle in the marketing window of late-May through mid-August than a year ago. Note that many of those animals are heifers. Those large marketings will likely pressure slaughter-ready steer and heifer prices, which are forecast to be below 2017’s. Those prices suggest dampened demand for feeder cattle late this spring on into the summer months.”