Firmer wholesale beef values helped Cattle futures close mostly higher on Tuesday, after follow-through pressure early in the session.
Live Cattle futures closed an average of 72¢ lower through the front three contracts and then unchanged to 50¢ higher.
Feeder Cattle futures closed an average of 41¢ higher.
Boxed beef cutout values were steady to firm on fairly good demand and moderate offerings, according to the Agricultural Marketing Service.
Choice boxed beef cutout value was 40¢ higher Tuesday afternoon at $207.32/cwt. Select was 23¢ lower at $198.39.
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Major U.S. financial indices closed higher Tuesday, buoyed by strong quarterly earnings, including better than expected results from Dow DuPont and Proctor & Gamble.
The Dow Jones Industrial Average closed 143 points higher. The S&P 500 closed 9 points higher. The NASDAQ closed 3 points higher.
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When all was said and done last week, the 5-area weighed average steer price was $5.76 higher at $112.63/cwt. on a live basis; $8.87 higher in the beef at $178.77.
“The higher prices may not pull closeouts completely out of the red, but it will reduce losses significantly and may make a few cattle profitable,” says Andrew P. Griffith, agricultural economist at the University of Tennessee, in his weekly market comments. “This price resurgence does not necessarily mean fed cattle prices have hit their summer low, as the potential to move to the $105 area re-mains feasible. However, higher prices may be shedding some light that moving that low is not as likely as previously thought. The stronger live cattle prices have also strengthened cattle feeders’ outlook which means strong demand for feeder cattle.”
Pressure on grain prices is helping, too.
“The weakening feed market has translated into strengthening calf prices relative to the fed cattle and beef markets,” says Stephen Koontz, agricultural economist at Colorado State University, in the latest issue of In the Cattle Markets. “The overall protein market outlook is much the same as the beginning of summer: there is a lot of protein to come to market through the summer and fall—and no end to the potential trade gymnastics—but the calf market outlook is holding strong largely because of cheapening feed.”