Cattle futures edged higher again Thursday, with even lighter trade and less open interest than in the previous session. Support for the day included Lean Hog futures—limit up in the front months, on possible resumption of trade talks with China.
Except for unchanged in spot Aug and 17¢ lower in the back contract, Live Cattle futures closed an average of 37¢ higher.
Feeder Cattle futures closed an average of 68¢ higher (7¢ higher at the back of the board to $1.22 higher in spot Aug).
Boxed beef cutout values were lower on Choice and higher on Select with light to moderate demand and offerings, according to the Agricultural Marketing Service.
Choice boxed beef cutout value was 85¢ lower Thursday afternoon at $209.10/cwt. Select was 85¢ higher at $201.46.
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Major U.S. financial indices, especially the DJIA climbed higher Thursday on the reports that the U.S. and China agreed to resume trade talks. Strong quarterly earnings also provided support.
The Dow Jones Industrial average closed 396 points higher. The S&P 500 closed 22 points higher. The NASDAQ was up 32 points.
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“The strength in prices (feeder) may be supported by moderate feed costs and the prospect of higher fed cattle prices in 2019,” say analysts with USDA’s Economic Research Service (ERS), in the latest Livestock, Dairy and Poultry Outlook. “The feeder steer price forecasts for the third quarter and fourth quarter of 2018 were revised higher from last month to $147-$151/cwt. and $143-$151. The 2019 full-year price forecast was raised to $138-$150/cwt.”
Fed cattle price estimates were unchanged from the previous month at $115-$117 for 2018 and $113-$122 for 2019.
“Fed cattle marketings appear to be a reflection of meatpackers managing slaughter cattle volumes, and feedlots responding to potentially better margins in the near future,” say ERS analysts. “This will likely keep pressure on fed steer prices in third-quarter 2018.”