Although 50¢ lower in Colorado Thursday afternoon, negotiated cash fed cattle trade continued mostly steady on a live basis at $120/cwt. Dressed trade on Wednesday was steady to $2 higher at $190-$191. There could be some cleanup sales, but odds are that the trade is done for the week.
Cattle futures found some stability on Thursday as traders shored up positions ahead of Friday’s monthly Cattle on Feed report and the long holiday weekend.
Live Cattle futures closed an average of 42¢ higher (10¢ to 72¢ higher).
Except for $1.15 higher in spot Jan and marginally mixed in the back three contracts, Feeder Cattle futures closed an average of 56¢ higher.
Choice boxed beef cutout value was 3¢ lower on Thursday afternoon at $198.12/cwt. Select was $1.38 higher at $186.87.
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Major U.S. financial indices settled higher on Thursday. Some analysts credited overall bullishness to reports that some companies plan to channel savings from lower corporate tax rates toward employee wages. The Fed might get the inflation rate they’re after yet.
The Dow Jones Industrial Average closed 55 points higher. The S&P 500 closed 5 points higher. The NASDAQ closed 4 points higher.
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“Fed cattle prices edged higher early in the fourth quarter, but the availability of market-ready cattle—and nearby futures prices, which are likely encouraging cattle feeders to remain current in their marketings—have been pressuring cash prices,” said analysts with USDA’s Economic Research Service (ERS), in the recently released monthly Livestock, Dairy and Poultry Outlook. “In addition, wholesale prices (beef) appear to be at or near their seasonal peak. The November fed steer price averaged $121.37/cwt., but prices in early-December trended lower. As a result, the fourth-quarter fed steer price forecast was lowered slightly to $116-$119/cwt.” Prices did rebound slightly the past two weeks.
On the other side of the trade, ERS analysts lowered expectations for the fourth-quarter average feeder cattle price to $155-$159/cwt.
Likewise, ERS lowered cull cow prices expected in the fourth quarter to $56-$58/cwt.
“Cow prices are seasonally lower during the fourth quarter, but prices have also come under pressure due to higher than year-ago cow slaughter,” ERS analysts say. “Commercial cow slaughter, especially of beef cows, continues to be relatively heavy so far in the fourth quarter.”