Negotiated cash fed cattle trade remained undeveloped through Wednesday afternoon, but packer interest seemed to pick up, at least on a token basis. Although too few transactions to trend, a few western Corn Belt trades were reported at $123-$124/cwt. on a live basis and at $199-$200 in the beef.
There were 785 head offered in the weekly Fed Cattle Exchange auction. There were no sales, but three lots passed out at $125/cwt.
Cattle futures closed lower, amid likely overall position squaring and beneath the umbrella of uncertainty regarding if and when a trade deal will be completed with China. Aside from light trade, recently firmer grain prices added drag to Feeder Cattle.
Live Cattle futures closed an average of 47¢ lower.
Feeder Cattle futures closed an average of 74¢ lower.
Corn futures closed mostly fractionally mixed.
Soybean futures closed mostly 1¢ lower, following the previous session’s strong gains.
Wholesale beef values were weak to lower on light to moderate demand and offerings, according to the Agricultural Marketing Service.
Choice boxed beef cutout value was 72¢ lower Wednesday afternoon at $216.44/cwt. Select was 99¢ lower at $212.01.
Major U.S. financial indices closed higher Wednesday, with optimism over a tentative plan that would avoid another government shutdown, as well as reports that the U.S. may be flexible in its Mar. 1 deadline with China as the two nations toward a trade deal.
The Dow Jones Industrial Average closed 117 points higher. The S&P 500 closed 8 points higher. The NASDAQ was up 5 points.
Aggressive herd expansion for the past five years—and expectations of continued minimal expansion for another year or two—will continue to provide cyclical price risk, explained Kevin Good, CattleFax analyst, at that organization’s recent Outlook Seminar.
Along the way, Good noted that growing supplies of cattle will shift leverage to the feeding sector from cow-calf producers and stocker operators.
“Cattle producers, on average, will receive a smaller percentage of the retail beef dollar as larger cattle supplies increase price pressure across all segments of the industry,” Good said. “Retail beef prices will likely see some inflation in 2019, but larger beef, pork and poultry production will be price limiting.”
CattleFax projects the all-fresh retail beef price to average $5.73/lb. this year, up 6¢ from last year, with the composite carcass cutout value increasing $4 to average $216/cwt.