Cattle Current Daily-Jan. 4, 2019

Cattle Current Daily-Jan. 4, 2019

Negotiated cash fed cattle trade was steady at $123/cwt. in the Southern Plains through Thursday afternoon, with moderate demand and slow trade in the Texas Panhandle; moderate trade and demand in Kansas. There were a few live sales in Nebraska at the same price and steady with the prior week, but too few to trend.

Sharply lower outside markets and higher grain prices pressured Feeder Cattle futures on Thursday. Live Cattle softened some, but received support from steady cash fed cattle and wholesale beef values.

Except for 5¢ higher in away Feb, Live Cattle futures closed an average of 25¢ lower.

Feeder Cattle futures closed an average of $1.24 lower.

Corn futures closed mostly 3¢ to 4¢ higher through Sep ‘20 and then fractionally higher to 1¢ higher.

Soybean futures closed mostly 3¢ to 6¢ higher.

Wholesale beef values were steady on Choice and lower on Select with light to moderate demand and moderate to heavy offerings, according to the Agricultural Marketing Service.

Choice boxed beef cutout value was 15¢ lower Thursday afternoon at $216.49/cwt. Select was $1.53 lower at $209.38.

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Major U.S. financial indices plunged Thursday, fueled by increasing worries about slowing global economic growth. A letter from Apple to investors seemed to fuel the selloff. Apple sees its first-quarter revenue at $84 billion, significantly lower than previous estimates and about $7 billion short of analyst expectations, according to various reports.

“While we anticipated some challenges in key emerging markets, we did not foresee the magnitude of the economic deceleration, particularly in Greater China,” explained Apple CEO, Tim Cook, in the letter. “In fact, most of our revenue shortfall to our guidance, and over 100 percent of our year-over-year worldwide revenue decline, occurred in Greater China across iPhone, Mac and iPad.”

Domestically, investors also appeared rattled by a softer Purchasing Managers Index (PMI®) than expected. The December PMI was 54.1%, down 5.2% from the previous month, according to the latest Manufacturing ISM® Report On Business®.

The Dow Jones Industrial Average closed 660 points lower. The S&P 500 closed 62 points lower. The NASDAQ was down 202 points.

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“Beef production in 2018 is projected to total nearly 27 billion lbs. of beef products resulting from the slaughter of 33 million head of cattle. The economic system that connects cattle production to beef consumption is remarkably complex and is a challenge for producers and consumers alike to understand and appreciate,” says Derrell Peel, Extension livestock marketing specialist at Oklahoma State University, in his weekly market comments.

Peel points to the diverse markets for beef, geographic production diversity, the array of demand factors affecting individual beef items, let lone beef overall, as well as beef’s perishability. Plus, meeting fresh beef demand requires a continuous flow of slaughter-ready cattle, despite the fact that about 80% of the nation’s calves are born in the spring.

“As we wrap up 2018, it’s worth a moment to pause and consider the amazing day-to-day performance and accomplishments of the U.S. cattle and beef industry,” Peel says. “Cow-calf and stocker producers, feedlots, packers, further processors and a host of other workers in transportation, stocking, cooking, serving and countless other industry participants work every day to make sure that restaurant diners and grocery shoppers don’t have to think about where and how beef came to be available at that moment…or indeed that it would be there at all. It truly is a miracle.” 

2019-01-03T20:41:08-05:00

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