Technical selling helped pressure Cattle futures again on Friday, despite the higher cash trade and strong wholesale beef values. More supply is coming, but current pressure seems overdone.
Live Cattle futures closed an average of 42¢ lower (15¢ to 70¢ lower).
Feeder Cattle futures closed an average of 37¢ lower (10¢ to 65¢ lower).
Choice boxed beef cutout value was 60¢ higher Friday afternoon at $225.59/cwt. Select was 55¢ higher at $216.86.
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Major U.S. financial indices edged to a mixed close on Friday. Support included the latest Surveys of Consumers from the University of Michigan, indicating that consumer sentiment rose in early March to the highest level since 2004.
The Dow Jones Industrial Average closed 72 points higher. The S&P 500 closed 4 points lower. The NASDAQ closed fractionally higher.
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Grocery store sales growth in January was up 4.5% from 12 months earlier, the stoutest monthly year-over-year gain since January of 2015, according to the Livestock Marketing Information Center (LMIC), in the latest Livestock Monitor. Likewise, analysts there say food sector sales growth (grocery store plus food service and drinking places) during January was up 3.1% from a year ago.
“Wholesale demand for the three leading meat commodities (beef, pork and chicken) trends are generally consistent with the consumer spending situation,” LMIC analysts explain. “The Choice beef cutout will be up this quarter from the last quarter of 2017, which is a little better than estimates indicated at the end of last year that were driven by an outlook for larger beef production. Similarly, the pork cutout has also gained value this quarter from late 2017, even with larger pork production. Chicken breast meat prices at the wholesale level have held steady in January and February, in line with expectations at the start of the year. Chicken wing prices in wholesale trade have been surprisingly weak so far this year, which may be a consequence of modest sales growth in the food service and drinking place sector so far this year.”