WLI

Cattle futures finally rallied from their recent doldrums on Tuesday. There isn’t anything to suggest any driver other than technical correcting and potential bottom picking.

Live Cattle futures closed an average of $1.10 higher (80¢ to $1.42 higher).

Feeder Cattle futures closed an average of $1.76 higher (87¢ to $2.22 higher).

Choice boxed beef cutout value was $1.47 lower on Tuesday afternoon at $204.06/cwt. Select was 26¢ higher at $185.92.

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Major U.S. financial indices closed mixed on Tuesday. Support was reportedly tied to increasing optimism over the tax proposal.

The Dow Jones Industrial Average closed 118 points higher. The S&P 500 closed 4 points higher. The NASDAQ closed 12 points lower.

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Beef production this year was lowered slightly in the latest World Agricultural Supply and Demand Estimates (WASDE) released yesterday. The reduction came from the current pace of cattle slaughter and lighter carcass weights.

Total red meat and poultry production for this year was also projected lower on reduced beef and pork production.

Based on softer, recent prices, WASDE estimates were a touch lower for fed cattle prices in the fourth quarter ($116-$119/cwt.) and for the year ($121.42).

Price estimates for fed cattle in 2018: first quarter, $117-$123; second quarter, $112-$122; third quarter, $110-$120; 2018 annual, $113-$122.

Cattle futures settled mostly nominally lower on Monday, following a two-side session with early pressure, a surge in support for Feeder Cattle and then running out of steam.

Except for 15¢ higher in the back contract, Live Cattle futures closed an average of 41¢ lower (5¢ to 62¢ lower).

Other than 85¢ lower in the back contract, Feeder Cattle futures closed narrowly mixed, mostly to the down side (22¢ higher to 37¢ lower).

Choice boxed beef cutout value was 6¢ lower on Monday afternoon at $205.53/cwt. Select was 31¢ lower at $185.66.

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Major U.S. financial indices closed higher on Monday, supported by bullishness in energy and tech stocks.

The Dow Jones Industrial Average closed 56 points higher. The S&P 500 closed 8 points higher. The NASDAQ closed 35 points higher.

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“There seems little doubt that herd expansion continued in 2017, albeit at a slower pace than 2016,” says Derrell Peel, Extension livestock marketing specialist at Oklahoma State University, in his market comments this week.

When the January Cattle inventory report comes out at the end of January, Peel expects the numbers will show that the beef cowherd grew 1.5-2.0% this year. Higher expansion rates are possible, but he just doesn’t see it in the current data. Likewise, a lower rate of expansion is possible, but Peel says that would mean an unusually large percentage of bred heifers available on January 1 of this year never entered the herd…again, unlikely.

For perspective, there were 31.2 million beef cows at the beginning of this year. That represented 7.2% growth in the beef cowherd the start of 2014.

Cattle futures edged lower on Friday…though softer week to week, cash calf and feeder cattle prices should strengthen seasonally with the new year… coming up on your Cattle Current Market Update with Wes Ishmael.

Cattle futures settled lower on Friday, after follow-through support early in the session. The overall tone remains weak.

Except for a few cents higher in a couple of contracts, Live Cattle futures closed 32¢ lower.

Feeder Cattle futures closed an average of 85¢ lower (67¢ to $1.17 lower).

Choice boxed beef cutout value was 51¢ higher on Friday afternoon at $205.59/cwt. Select was $2.14 higher at $185.97.

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Major U.S. financial indices closed higher on Friday, buoyed by the monthly employment outlook. Total non-farm employment increased by 228,000 in November, according to the U.S. Bureau of Labor Statistics. That was more than the trade expected.

The Dow Jones Industrial Average closed 117 points higher. The S&P 500 closed 14 points higher. The NASDAQ closed 27 points higher.

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Although cash calf and feeder cattle prices softened recently—under pressure from deteriorating Cattle futures—Andrew P. Griffith, Agricultural economist at the University of Tennessee, expects prices to strengthen seasonally in the first quarter of the new year.

“The sudden price downturn is likely to reverse and move back to the trading range that has been consistent since the middle of September,” Griffith says, in his weekly market comments. “Additionally, prices for lightweight calves tend to strengthen after the first of the year. Similarly, feeder cattle prices generally find support in January, though they have been supported most of the fourth quarter of 2017. It may also be important for producers to realize that it may be difficult for calf and feeder cattle prices to outpace the prices realized the last few months of 2017. Fall calf and feeder cattle prices were supported throughout the fall marketing time period, which is rare. However, the market simply followed the live cattle market, which it is expected to do in the coming months. Thus, as live cattle prices begin to escalate late in the first quarter of 2018, so will feeder cattle prices. Calf prices toward the end of the first quarter will be supported by the feeder cattle market and abundant spring forage.”

Negotiated cash fed cattle trade continued on Thursday. Live sales so far are $2-$4 lower than last week at $117.00 to $118.50/cwt. Dressed sales are $3-$4 lower at $186-$187.

Helped along by short covering, Cattle futures found some stability on Thursday after strong pressure continued early in the session.

Live Cattle futures closed narrowly mixed (40¢ higher to 60¢ lower).

Feeder Cattle futures closed an average of 26¢ higher, except for 35¢ to 75¢ lower in the back three contracts.

Choice boxed beef cutout value was $1.32 lower on Thursday afternoon at $205.08/cwt. Select was 28¢ lower at $183.83.

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Major U.S. financial indices closed higher on Thursday, led by gains in tech stocks.

The Dow Jones Industrial Average closed 70 points higher. The S&P 500 closed 7 points higher. The NASDAQ closed 36 points higher.

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Producers expressed lower sentiment toward the agricultural economy in November, on the heels of fall harvest, according to the Purdue University/CME Group Ag Economy Barometer.

The November barometer declined 7 points to 128, the second-lowest reading of 2017.

“The November slide in sentiment was primarily driven by reduced optimism about the future,” says James Mintert, the barometer’s principal investigator and director of Purdue University’s Center for Commercial Agriculture. “We saw the Index of Future Expectations fall by 10 points, while the barometer’s other sub-index, the Index of Current Conditions, held steady at 129.”

When asked whether they thought the next 12 months would be good times or bad times financially for the agricultural economy as a whole, 62% saw bad times ahead. The negative expectation has been growing since July when 50% expected worsening financial conditions.

The barometer is based on a monthly survey of 400 agricultural producers from across the country.