Negotiated cash fed cattle trade remained undeveloped through Friday afternoon, with prices for the week looking to be steady to higher.
Lower feedlot performance tied to winter weather, and apparent short covering ahead of the holiday weekend, helped boost Live Cattle futures Friday; Feeder Cattle tagged along to a lesser degree. Strong gains in Lean Hog futures also provided support.
Except for 57¢ lower in spot Feb, Live Cattle futures closed an average of 45¢ higher.
Except for 10¢ lower in March, Feeder Cattle futures closed an average of 20¢ higher.
Soybean futures moved higher Friday, presumably on adverse South American weather and hopes for trade talks; corn followed along.
Corn futures closed fractionally higher to 2¢ higher through Sep ’20 and then mostly fractionally lower.
Soybean futures closed 7¢ to 9¢ higher through Sep ’20 and then 4¢ to 5¢ higher.
Wholesale beef values were firm to higher on moderate to good demand and light offerings, according to the Agricultural Marketing Service.
Choice boxed beef cutout value was 65¢ higher Friday afternoon at $213.15/cwt. Select was $1.81 higher at $209.45.
Major U.S. financial indices closed sharply higher Friday on reports that China pledged to boost U.S. imports for the next six years.
The Dow Jones Industrial Average closed 336 points higher. The S&P 500 closed 34 points higher. The NASDAQ was up 72 points.
Choice wholesale beef value never ran as high as some anticipated heading into the holidays, but they remain higher year over year.
Through the front half of January, Choice boxed beef cutout value ranged from $212.02 to $216.64/cwt. compared to $205.14 to $210.49 a year earlier.
“The higher cutout (Choice) value stems from higher middle meat prices and remains higher despite lower end meat prices,” says Andrew P. Griffith, agricultural economist at the University of Tennessee, in his weekly market comments. “As an example, the wholesale beef ribeye price is $53/cwt. higher (+7.7%) than the same time one year ago. Similarly, the wholesale beef full tender price is $62 higher (+6.4%) than January one year ago. Despite the support provided by middle meats, end meat prices such as the bottom round are $18/cwt. lower (-8.6%) than last year. Despite the struggles in the round and chuck, the brisket and short plate are also providing support to overall value.”
Griffith reminds that beef cutout values—composite values—are calculated by multiplying the prices of individual beef cuts by the percentage of the carcass that comprises them.
For perspective, Griffith share this breakdown of primals and the percentage of the carcass they represent: rib (11.40%), chuck (29.62%), round (22.32%), loin (21.26%), brisket (4.95%), short plate (7.10%), and flank (3.35%).