Negotiated cash fed cattle trade was slow on light to moderate demand in Nebraska through Thursday afternoon, with a few dressed trades at $175/cwt.; steady with last week, but too few to trend.
Early support faded in Cattle futures Thursday, ending with a mainly narrowly mixed to narrowly lower close.
Except for 65¢ lower in spot Oct, Live Cattle futures closed narrowly mixed, from 2¢ to 25¢ lower across the front half of the board, then 5¢ to 15¢ higher the rest of the way.
Other than 15¢ higher in spot Sep, Feeder Cattle futures closed an average of 29¢ lower, with most pressure in the front contracts.
Wholesale beef values were firm on moderate to fairly good demand and moderate to heavy offerings, according to the Agricultural Marketing Service.
Choice boxed beef cutout value was 27¢ higher Thursday afternoon at $204.52/cwt. Select was 73¢ higher at $194.91.
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Major U.S. financial indices surged higher Thursday, fueled by global bell-weather stocks such as Boeing, Caterpillar and Apple, presumably on optimism over what traders gauged as a muted response by China to the most recent tariffs imposed by the U.S.
The Dow Jones Industrial Average closed 251 points higher. The S&P 500 closed 22 points higher. The NASDAQ was up 78 points.
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“A strong domestic economy and robust exports have buffered beef, and hence, cattle prices against near record large U.S. beef production and all-time highs in competing meats and poultry supplies,” say analysts with the Livestock Marketing Information Center (LMIC), in the latest Livestock Monitor. “There are unknowns and potential headwinds for cattle markets during the next few years, not the least of which is the potential for U.S. beef, pork, and chicken exports to falter under a cycle of tariffs and retaliation. Also, any significant weakness in the domestic or global economy compared to the healthy conditions of the last 12 months could dampen demand for beef, and therefore cattle.”
In the meantime, LMIC analysts point out projected beef production this year of 27.5 billion lbs.—assuming normal weather conditions—will be the smallest year-to-year increase since 2015 at 1-2%.
“In the first quarter of 2019, fed cattle prices could be below 2018’s. In subsequent quarters prices are forecast to be similar to a year earlier,” say LMIC analysts. “A normal 2019 Midwest corn crop would set the stage for steady to modestly higher yearling and calf cattle prices in the second half of 2019, compared to the corresponding quarters in 2018.”