Feeder Cattle futures closed an average of 98¢ higher on Friday with continued cash strength and stabilizing Corn futures. Week to week, though, they were an average of $3.37 lower, pressured by surging Corn futures, which were an average of 52’1¢ higher through the front six contracts.
Live Cattle futures closed an average of 32¢ higher on Friday, supported by firmer wholesale beef values.
Choice Boxed beef cutout value was $1.47 higher Friday afternoon at $269.24/cwt. Select was $1.44 higher at $242.25/cwt.
Negotiated cash fed cattle trade ranged from slow on light to moderate demand to mostly inactive on light demand through Friday afternoon, according to the Agricultural Marketing Service. There were a few live sales in the western Corn Belt at $144-$145/cwt., but too few to trend.
For the week, live prices were $1 lower in the Southern Plains at $135/cwt., $1.00-$5.50 lower in Nebraska at $139.00-$143.50 and steady in the western Corn Belt at $141-$145. Dressed prices were $2 lower in Nebraska at $225 and $3-$5 lower in the western Corn Belt at $224-$225.
Estimated total cattle slaughter for the week of 669,000 head was 4,000 head more than the previous week and 23,000 head more than the same week last year. Total estimated year-to-date cattle slaughter of 19.48 million head was 234,000 head more (+1.2%) than the previous year. Estimated total year-to-date beef production of 16.07 billion lbs. was 169.5 million lbs. more (+1.1%) than a year earlier.
Major U.S. financial indices closed higher Friday, led by tech and energy stocks, and supported by a slight improvement in the closely watched University of Michigan Index of Consumer Sentiment.
The Dow Jones Industrial Average closed 315 points higher. The S&P 500 closed 57 points higher. The NASDAQ was up 228 points.
CME WTI Crude Oil futures closed $1.89 to $2.20 higher through the through the front six contracts.
The CME Feeder Cattle Index closed $1.30 higher week to week on Thursday at $172.31/cwt. Andrew P. Griffith, agricultural economist at the University of Tennessee notes in his weekly market comments the Feeder Cattle Index increased $19/cwt. between June 1 and July 27, while spot Feeder Cattle futures increased about $8.
“The cash feeder cattle market and the Feeder Cattle futures are jockeying for position in an attempt to determine where prices should be,” Griffith says. “The basis, or the difference between cash prices and futures prices, has narrowed considerably as the market is moving into August. This is to be expected as cash prices and futures prices should converge. Part of the narrowing of basis has been from futures declining slightly, but most of the narrowing of the basis has come from higher cash prices. Prices will continue to converge through August. It is unknown if it will be through higher cash prices or lower futures prices. Producers should hope for the former.”