Cattle Current—April 17, 2023

Cattle Current—April 17, 2023

Negotiated cash fed cattle trade ranged from limited on light demand to mostly inactive on light demand through Friday afternoon, according to the Agricultural Marketing Service.

Live prices last week were $5 higher in the Southern Plains at $175/cwt., $8-$9 higher in Nebraska at $182-$186 and $6-$7 higher in the western Corn Belt at $180-$184. Dressed prices were $5-$10 higher at $290.

Choice boxed beef cutout value was $2.20 higher Friday afternoon at $302.62/cwt. Select was 49¢ higher at $283.87/cwt. Week to week on Friday, Choice was $11.64 higher and Select was $8.09 higher.

Estimated total cattle slaughter last week of 613,000 head was 10,000 head more than the previous week but 25,000 head fewer than the same week last year. Estimated year-to-date cattle slaughter of 9.4 million head was 284,000 head fewer (-2.9%) than the same period a year earlier. Estimated year-to-date beef production of 7.7 billion pounds was 373.2 million pounds less (-4.6%).

Cattle futures finished mostly lower on Friday, weighed down by surging Corn futures.

Feeder Cattle futures closed an average of 88¢ lower (42¢ to $1.12 lower), except for 72¢ and 10¢ higher in the front two contracts.

Live Cattle futures closed an average of 43¢ lower, except for 12¢ higher in away Jun.

Week to week on Thursday, though, Feeder Cattle futures closed an average of $3.52 higher and Live Cattle futures closed an average of $1.41 higher.

Corn futures closed mostly 5¢ to 6¢ higher as traders appeared to apply some weather risk premium.

KC HRW Wheat closed mostly 29¢ to 33¢ higher powered by lingering drought, as well as resurgent rhetoric from Russia that it will withdraw from the Black Sea Initiative if the West fails to meet specific conditions.

Soybean futures closed mostly 10¢ to 12¢ lower, pressured by bullish Brazilian production expectations.

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Major U.S. financial indices softened Friday with pressure including weaker retail sales than expected.

Advance estimates of U.S. retail and food services sales for March 2023, were 1% less than the previous month but 2.9% higher year over year, according to the U.S. Census Bureau.

The Dow Jones Industrial Average closed 143 points lower. The S&P 500 closed 8 points lower. The NASDAQ was down 42 points.

West Texas Intermediate Crude Oil futures (CME) closed 36¢ to 39¢ lower through the front six contracts.

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“It was not that long ago that many cattle market analysts debated and held fast to the notion that live cattle prices would not reach and exceed $170 this spring. The market is now trading at $180, and most of those same analysts are smart enough to now be asking the question of just how high is this market going to go,” says Andrew P. Griffith, agricultural economist at the University of Tennessee, in his weekly market comments. “There is no reason to put a limit on price expectations at this point because finished cattle prices have already surpassed what most people thought they would do this spring. The continued price run is hard to fathom as prices dance around $180. One would think that upside potential is waning at this point, but it is doubtful there will be much weakness through the summer and fall months, either.”

Griffith notes the expected seasonal increase in wholesale beef prices should provide underpinning.

“Wholesale beef prices should be supported the next six weeks as many retailers are purchasing for the summer grilling season and the unofficial kickoff to summer that is the Memorial Day weekend,” Griffith says. “Not only is the market being supported by the upcoming grilling season, but the start of baseball season tends to support beef movement as lots of hamburgers and hotdogs are consumed at baseball fields, regardless of whether it is 5-year-old children playing or it is the Atlanta Braves. There is likely room in the wholesale beef market for prices to continue escalating.

2023-04-16T15:59:02-05:00

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