Cattle Current Daily—Feb. 18, 2019

Cattle Current Daily—Feb. 18, 2019

Negotiated cash fed cattle trade remained undeveloped through Friday afternoon. A few live trades were reported in the western Corn Belt at $124-$127/cwt., but too few to trend.

Cattle futures softened, especially front-month Feeder Cattle. According to various chatter, part of the pressure for Feeder Cattle was attributed to thoughts that grain prices will pop, at least in the short term, when the U.S. and China resolve trade issues. 

Except for 50¢ higher in spot Feb, Live Cattle futures closed an average of 21¢ lower. 

Feeder Cattle futures closed an average of $1.28 lower through the front three contracts and then an average of 64¢ lower.

Corn futures closed fractionally mixed. 

Soybean futures closed 3¢ to 4¢ higher, following the steep declines in the previous session.

Wholesale beef values were firm to higher on fairly good demand and moderate offerings, according to the Agricultural Marketing Service.

Choice boxed beef cutout value was 78¢ higher Friday afternoon at $216.85/cwt. Select was 58¢ higher at $210.99. 

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Major U.S. financial indices closed sharply higher Friday. Support included Congress passing and President Trump signing legislation to fund the government and avoid another shutdown. There was also growing optimism that the U.S. and China were close to striking a trade deal.

The Dow Jones Industrial Average closed 443 points higher. The S&P 500 closed 29 points higher. The NASDAQ was up 45 points.

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“The big story in cattle markets the past few weeks has been the increase in slaughter cow prices,” says Andrew P. Griffith, agricultural economist at the University of Tennessee, in his weekly market comments. “Cow-calf producers have been concerned about low slaughter cow prices since the middle of October when prices in Tennessee dipped into the mid $40s and proceeded to the low $40 level for November and December. In the past four weeks, Tennessee slaughter cow prices have increased $10/cwt. and are now at their highest level since the first week of August. The $10 increase the past month is essentially $120 to $140 more per head. The seasonal tendency would say there is still room for slaughter cow prices to increase, which means they could reach $60/cwt., resulting in $60 to $70 more per head than the current week’s value.”

At the organization’s recent Outlook Seminar, CattleFax projected additional downside price risk to cull cow prices this year.

“Years of expansion and poor operating margins in the dairy sector are generating more cull cows, which weighs on the markets,” explained CattleFax analyst, Kevin Good. “The additional supply and the limited packing capacity for non-fed cattle will result in a market which averages approximately $55/cwt. during 2019, with a spring high near $60/cwt. and a fall low in the lower $40s.”

2019-02-17T17:39:29-05:00

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