Negotiated cash fed cattle trade was undeveloped Wednesday, as expected. There was chatter about steady to higher prices this week, though, based on current demand and an estimated holiday harvest larger than many expected.
Cash fed cattle prices last week were steady to a touch higher. Live prices were $119/cwt. in Kansas and Nebraska ($118-$120 in the western Corn Belt). Dressed prices were $190.
Cattle futures closed narrowly mixed to higher (Feeder Cattle), supported by firm fed cattle prices and boxed beef cutout values.
After 47¢ higher in spot Dec, Live Cattle futures closed narrowly mixed (17¢ lower to 7¢ higher). On Monday, except for unchanged in the spot month, they were an average of 22¢ higher.
Feeder Cattle futures closed an average of 34¢ higher. They were an average of 32¢ higher on Monday.
Wholesale beef values were steady on Select and higher on Choice with light to moderate demand and offerings, according to the Agricultural Marketing Service.
Choice boxed beef cutout value was $1.64 higher Wednesday afternoon at $215.69/cwt. Select was 10¢ higher at $207.60.
Major U.S. financial indices blasted sharply higher Monday, regaining the steep losses from Monday’s short session, and then some. Support included retail and energy stocks. Crude oil prices (WTI-CME) closed $3.51 to $3.72 higher through the front 12 contracts. On Monday, spot Feb plunged to $42.53; it ended Wednesday at $46.22.
On the other side of the equation, plenty of worry continues over an assortment of issues, including slowing global economic growth, the trade standoff with China, rising interest rates and the domestic government shutdown.
On Wednesday, the Dow Jones Industrial Average closed 1,086 points higher. The S&P 500 closed 116 points higher. The NASDAQ was up 361 points.
By way of review, the DJIA plummeted 653 points in Monday’s holiday-shortened session. The NASDAQ closed 140 points lower Monday; 65 points lower for the S&P 500.
Feedlot returns appear positive from now through the first quarter of the new year, based on the most recent Historical and Projected Kansas Feedlot Net Returns, from Kansas State University (KSU).
Currently, the net returns projected for closeouts in November are +$4.88 per head for steers and -$1.18 per head for heifers, according to Glynn Tonsor, KSU agricultural economist, who prepares the report. He reminds that the estimates assume no price risk management.
Projected returns for steers jump to +78.11 per head for December with an estimated feedlot cost of gain of $83.19/cwt. From there, projected returns remain in the black (+$29.46 to +$80.71) through March of 2019.
Likewise, projected returns for heifers bounce to +$62.46 per head for December with an estimated feedlot cost of gain of $90.83/cwt. Projected returns fall to -$13.17 in January, then climb to +$8.05 and +$33.54 in February and March, respectively.
Improved projections compared to the previous month are mostly due to about $5 more in forecast sales prices, according to Tonsor.