WLI

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.

Apparently traders considered the previous day’s Cattle inventory numbers to their liking as Cattle futures steamed ahead with apparent short covering, technical buying and perhaps concerns about the expanding drought.

Live Cattle futures closed an average of $2.29 higher.

Feeder Cattle futures closed at average of $3.99 higher.

Wholesale beef values continued in sideways trade on Thursday. Choice boxed beef cutout value was 46¢ lower at $209.60. Select was 22¢ higher at 204.54.

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On Wall Street Thursday, major U.S. financial indices closed narrowly mixed in choppy trade. Less fourth-quarter U.S. production and worries about higher interest rates were credited with the pressure.

The Dow Jones Industrial Average closed 37 points higher. The S&P 500 closed 1 point lower. The NASDAQ closed 25 points lower.

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The U.S. beef industry is well positioned to capitalize on a growing global middle class and an improving economy, but trade uncertainty could hamstring the U.S. ability to capture market share in the coming years, according to a new report from CoBank’s Knowledge Exchange Division.

“Beef production in the U.S. is on the rise, and export outlets have never been more important,” says Trevor Amen, industry analyst with CoBank’s Knowledge Exchange Division. “However, he explains the U.S. is threatening to retreat from key trade deals, while U.S. beef export competitors are forging their own deals with major global beef importers.”

According to the CoBank report, approximately 80% of beef exports are sold to countries that could be affected by ongoing trade pact negotiations. Trade deals being negotiated or recently approved include the Trans Pacific Partnership, the North American Free Trade Agreement and the United States-Korea Free Trade Agreement. Those are either being renegotiated by the U.S. or we’ve dropped out of the agreement altogether.

Negotiated cash fed cattle trade and demand was light to moderate in Nebraska and the Western Corn belt through Wednesday afternoon. Live trade on Nebraska was mostly steady with the previous day at $126/cwt. Dressed trade there sold steady with the previous week at $200. Dressed trade in the western Corn Belt was also steady with the previous week at $200.

Elsewhere, trade and demand were light with a few live purchases at $126, steady with the previous day.

Wholesale beef values basically traded sideways. Choice boxed beef cutout value was 37¢ higher Wednesday afternoon at $210.06. Select was 5¢ lower at $204.32.

Cattle futures turned lower with some technical selling and position squaring. Perhaps some pressure came from worries about big numbers in the Cattle report released yesterday, which ultimately ended up in line with expectations (see below).

Feeder Cattle futures closed an average of $1.72 lower ($1.40 to $2.12 lower in spot Mar).

Live Cattle futures closed an average of 94¢ lower (57¢ to $1.25 lower).

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On Wall Street Wednesday, major U.S. financial indices closed higher, recovering a small portion of the previous day’s selloff.

The Dow Jones Industrial Average closed 72 points higher. The S&P 500 closed 1 point higher. The NASDAQ closed 9 points higher.

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The nation’s beef cowherd continued to expand last year at a slowing rate, according to the Cattle report released by USDA yesterday.

There were 31.72 million beef cows to start this year. That’s 509,800 head more (+1.63%) than Jan. 1 of 2017.

Of the eight states with 1 million or more beef cows, South Dakota producers added the most cows (+137,000 head), followed by Texas (+125,000) and Missouri (+111,000).

Of the states with more than 1 million beef cows, producers in only two them started the year with fewer cows: Kansas (-63,000) and Nebraska (-10,000).

There were 6.13 million beef replacement heifers, which was 3.72% less than at the beginning of last year.                                                                                                                                 

The total inventory of all cows and calves Jan. 1 was 93.70 million head, which was 0.74% more than the previous year.

Negotiated cash fed cattle trade was light to moderate in Kansas and Colorado through Tuesday afternoon was $1 lower than last week at $126/cwt., as some cattle feeders likely were taking advantage of the basis. Last week’s trade was $3-$4 higher at $125-$127/cwt., mostly $127. Dressed trade was $5 higher at $200. Though lower on the day, the price level speaks to currently tight front-end supplies, helped along by the recently strength in wholesale beef values.

Choice boxed beef cutout value was 58 higher Tuesday afternoon at $209.69. Select was 24 higher at $204.37. That’s $2.84 higher week to week for Choice and $4.21 higher for Select.

Live Cattle Futures slowed and average of 85¢ lower in the front two contracts and then narrowly mixed from 30¢ lower to 22¢ higher.

Feeder Cattle futures closed an average of 47¢ higher (17¢ higher in spot Mar to 95¢ higher.

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Major U.S. financial indices closed sharply lower on Tuesday. Profit taking seemed to be the order of the day with rising treasury yields hinting at higher inflation, and with wonderments about whether the current Fed meeting will lead to another hike in interest rates.

The Dow Jones Industrial Average closed 362 points lower; that’s 539 points lower in the last two sessions. The S&P 500 closed 31 points lower; 64 points lower in the last two days; 114 points lower in the last two sessions.