Futures edged higher on Friday, supported by short covering to end a lousy, bearish week.
Live Cattle futures closed an average of 77¢ higher (37¢ to $1.00 higher).
Feeder Cattle futures closed an average of 85¢ higher (52¢ to $1.37 higher).
Choice boxed beef cutout value was $1.03 lower Friday afternoon at $199.60/cwt. That’s the first time Choice cutout was below $200 since February. Select was 7¢ lower at $196.12. The Choice-Select spread was $3.48, the lowest since February.
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Major U.S. financial indices closed higher on Friday, following the steepest decline since May in the previous session. While fretting continues over North Korea, investors were reportedly encouraged by the Consumer Price Index of 0.1% in July being less than expected; as a gauge on inflation, some believe it’s too little to enable the Fed to hike interest rates in September.
The Dow Jones Industrial Average closed 14 points higher. The S&P 500 closed 3 points higher. The NASDAQ closed 39 points higher.
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“Despite the lower market, analysts with the Agricultural Marketing Service said on Friday that low feed costs and the surplus of corn in farmer feeder country continues to spur demand for steers. They explain that Prices in the Northern Plains and upper Midwest continue to be the highest in the nation, adding that Cattle producers in that area are taking advantage of the market before demand decreases when farmers get busy with corn and soybean harvest.”
Feeder cattle opened the week steady to $4/cwt. higher in the cash market, before the rout began in Cattle futures. By the end of the week, they were trading $3-$10 lower. That was for the North Central and South Central Plains. Prices were mixed in the Southeast, from $8 lower to $6 higher, according to AMS.
Reflecting on the week’s prices, AMS analysts note, “The last time cash fed cattle prices and spot live cattle futures were this low was in December 2016.”