Cattle futures surged higher Friday, supported by strong fundamentals and perhaps receiving a boost from stronger outside markets.
Live cattle futures were an average of $1.73 higher. Feeder Cattle futures were an average of $4.18 higher. Week to week on Friday, Feeder Cattle futures were an average of $16.86 higher and Live Cattle were an average of $7.01 higher.
Negotiated cash fed cattle trade ranged from inactive on moderate demand in the North to moderate on moderate to good demand in the Texas Panhandle through Friday afternoon, according to the Agricultural Marketing Service.
For the week, FOB live prices were mostly $5 higher in the Southern Plains at $240/cwt., steady to $2 higher in Nebraska at $245 and steady to $5 higher in the western Corn Belt at $245. Dressed delivered prices in Nebraska were $5-$7 higher at $385-$392.
Dressed delivered prices the previous week were $380-$385 in the western Corn Belt.
Choice boxed beef cutout value was 5¢ higher Friday afternoon at $407.91. Select was 6¢ higher at $383.66. Week to week on Friday, Choice boxed beef cutout value was $7.34 higher and Select was $12.90.
Estimated total cattle slaughter last week of 547,000 head was 17,000 head more than the previous week but 62,000 head fewer than the same week last year. Estimated total year-to-date cattle slaughter of 18.9 million head was 1.4 million head fewer (-6.9%) than the same time last year. Estimated year-to-date beef production of 16.4 billion pounds was 679.9 million pounds less (-4.0%).
Turning to the grain complex, Corn futures were mostly fractionally mixed to 1¢ lower Friday with some likely week-end profit taking, but the lower yield outlook from the Pro Farmer crop tour could help Corn futures extend gains this week. Week to week on Friday, Corn futures were an average of 5’6¢ higher through the front six contracts.
Also on Friday, Kansas City Wheat futures were 4¢ to 5¢ lower. Soybean futures were mostly 1¢ to 3¢ higher.
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Major U.S. financial indices closed sharply higher Friday, buoyed by comments from Fed Chair Jerome Powell at the organization’s annual economic policy symposium. Apparently, investors interpreted the remarks as increased willingness to reduce interest rates.
The Dow Jones Industrial Average closed 846 points higher. The S&P 500 closed 96 points higher. The NASDAQ was up 396 points.
Through mid-afternoon, West Texas Intermediate Crude Oil futures (CME) were 10¢ to 14¢ higher through the front six contracts.
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USDA’s monthly Cattle on Feed report indicated more placements than expected but was friendly overall.
Feedlots with 1,000 head or more capacity placed 1.6 million head in July, which was 104,000 head fewer (-6.1%) year over year, but about 2.5% more than expectations ahead of the report.
In terms of placement weights, 36% went on feed weighing 699 pounds or less, 47% weighing 700-899 lbs. and 17% weighing 900 lbs. or more.
Marketings in July of 1.7 million head were 106,000 head fewer (-5.7%) year over year, which was in line with pre-report expectations.
Cattle on feed Aug. 1 of 10.9 million head were 173,000 head fewer (-1.6%), also near expectations ahead of the report.