Though still lower than the previous week, negotiated cash prices paid for fed cattle Friday were $1-$2 more than earlier in the week at $107-$108/cwt. in the Texas Panhandle and $107.50 in Nebraska.
Heading into Friday, plenty of folks figured negotiated cash fed cattle trade was pretty much done for the week, at mainly $105-$106/cwt. on a live basis and $170 in the beef.
Stronger cash trade helped Cattle futures surge higher Friday, presumably supported by technical buying, as well as short covering and profit taking for the end of the month and quarter.
The surge came despite an announcement during trading hours that Canada will assess surtaxes on $16.6 billion worth of U.S. imports—including beef products—in retaliation for U.S. tariffs on Canadian steel and aluminum imports (see below).
Except for $1.20 lower in expiring Jun, Live Cattle futures closed an average of $2.15 higher ($1.65 higher to limit up $3.00 in near Aug and Oct—the highest close since March).
Feeder Cattle futures closed an average of $2.92 higher ($1.55 higher to limit up $4.50 in spot Aug, the highest since March).
Boxed beef cutout values were lower on light demand and heavy to moderate offerings, according to the Agricultural Marketing Service.
Choice boxed beef cutout value was $1.28 lowerFriday afternoon at $211.96/cwt. Select was $2.09 lower at $198.57.
******************************
Major U.S. financial indices gained some ground on Friday, but not as much was had earlier in the session, with continued angst over trade issues.
The Dow Jones Industrial Average closed 55 points higher. The S&P 500 closed 2 points higher. The NASDAQ closed 6 points higher.
******************************
On Friday, the Canadian government announced, “…in direct, measured and proportional response to U.S. tariffs on Canadian steel and aluminum, reciprocal surtaxes on $16.6 billion of imports of steel, aluminum and other products from the United States will come into effect July 1, 2018.”
That’s in retaliation for new tariffs imposed by the U.S. on steel and aluminum imported from Canada.
The “other” products include U.S. beef products, according to the National Cattlemen’s Beef Association (NCBA).
“For the past few weeks Canada has threatened to retaliate against the United States by slapping a tariff on $170 million worth of U.S. beef products in direct response to the steel and aluminum tariffs,” explained Kent Bacus, NCBA Director of International Trade and Market Access on Friday. “Today, they made good on that threat. These retaliatory tariffs were and still are clearly avoidable, and the unfortunate casualties will be Canadian consumers and America’s cattlemen and cattlewomen. We may not know the extent of the damage these tariffs may have on our producers, but we believe that cooperation is a better path forward than escalation.”