Cattle futures closed sharply lower Friday on likely profit taking, week-end positioning and lack of weekly cash fed cattle direction. However, they still posted strong weekly gains.
Live cattle futures closed an average of $5.10 lower. Feeder Cattle futures closed mostly limit down, an average of $9.20 lower. However, week to week on Friday, Live Cattle futures closed an average of $3.78 higher and Feeder Cattle futures closed an average of $7.36 higher.
Negotiated cash fed cattle trade ranged from mostly inactive on moderate demand in the Southern Plains to moderate on moderate demand in the North through Friday afternoon, according to the Agricultural Marketing Service.
Although too few to trend, there were some FOB live trades at $245/cwt. in Nebraska and $240-$242 in the western Corn Belt with some up to $245. There were also some dressed delivered trades in Nebraska at $378-$385.
The previous week, FOB live prices were $235/cwt. in the Texas Panhandle, $235-$236 in Kansas, $245-$247 in Nebraska and mostly $245 in the western Corn Belt. Dressed delivered prices were mostly $383.
Choice boxed beef cutout value was 10¢ lower Friday afternoon at $378.84. Select was $1.34 higher at $355.09.
Estimated total cattle slaughter last week of 536,000 head was 1,000 head more than the previous week but 52,000 head less than the same week last year. Estimated year-to-date total cattle slaughter of 17.8 million head was 1.3 million head less (-6.6%). Estimated year-to-date beef production of 15.5 billion pounds was 580.6 million pounds less (-3.6%).
Grain and Soybean futures closed lower Friday with the monthly World Agricultural Supply and Demand Estimates looming Tuesday and speculation about how much USDA might increase estimated yields.
Corn futures closed mostly fractionally lower to 1¢ lower. Kansas City Wheat futures closed mostly 4¢ to 5¢ lower. Soybean futures closed mostly 6¢ to 7¢ lower.
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Major U.S. financial indices closed higher Friday, led by tech stocks.
The Dow Jones Industrial Average closed 206 points higher. The S&P 500 closed 49 points higher. The NASDAQ was up 207 points.
West Texas Intermediate Crude Oil futures (CME) closed unchanged to 15¢ lower through the front six contracts.
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Wholesale beef prices turned the seasonal corner last week with Choice boxed beef cutout value $15.62 higher week to week on Friday at $378.84/cwt. Select was $14.59 higher at $355.09.
“There is absolutely no doubt this price surge was spurred and supported by retailers and food service making purchases for the Labor Day weekend,” says Andrew P. Griffith, agricultural economist at the University of Tennessee, in his weekly market comments. “Now that the meat counter is stocked with beef, the question will be if consumers will be willing to purchase beef for the last grilling holiday of the year.”
Based on the resiliency of beef demand, Griffith suspects consumers will indeed step up to the plate for Labor Day.
“If consumers come through as is expected, then retailers will continue to support beef prices as they restock the meat counter,” Griffith explains. “The restocking of meat counters will not push wholesale beef prices higher, but it will slow the price decline that is expected as the market moves through the fall months.”