When all was said and done last week, negotiated cash fed cattle prices moved higher. Live sales in the Southern Plains and Nebraska were $2.00-$3.50 higher than the previous week at mostly $113/cwt. Dressed trade in Nebraska was $5-$6 higher at $178-$181. Compared to two weeks earlier, live trade in the western Corn Belt was mostly steady at $112. Dressed trade was steady to $3 higher at $178-$180.
Higher cash prices and firmer to stronger wholesale beef values helped Cattle futures move mostly higher to start the week.
Except for 20¢ lower in spot Aug, Live Cattle futures closed an average of 52¢ higher.
Except for 42¢ and 22¢ lower in the front two contracts, Feeder Cattle futures closed an average of $1.00 higher.
Wholesale beef values were firm to higher on good demand and moderate offerings, according to the Agricultural Marketing Service.
Choice boxed beef cutout value was 65¢ higher Monday afternoon at $204.82/cwt. Select was $1.03 higher at $198.03.
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Major U.S. financial indices closed narrowly mixed Monday, with support coming from tech stocks.
The Dow Jones Industrial average closed 13 points lower. The S&P 500 closed 5 points higher. The NASDAQ was up 21 points.
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“The modest increase in beef cows, combined with a smaller inventory of beef replacement heifers, suggests that herd expansion is slowing even more in 2018 after slowing in 2017,” says Derrell Peel, Extension livestock marketing specialist at Oklahoma State University, in his weekly market comments. “However, the ratio of July 1 to Jan. 1 beef cow inventory is 102.4, a level that historically implies positive herd expansion in the current year. The ratio is down from 2015 and 2017 levels (no 2016 July Cattle report was issued), again indicating slow expansion for the current year and perhaps a peak in the cow herd inventory in 2019.”
He’s referencing the mid-year Cattle inventory report issued by USDA Friday, showing 0.03% more beef cows than last year, but 2.13% fewer beef replacement heifers. Friday’s monthly Cattle on Feed report also underscored further increased placement of heifers.
“The July 1 quarterly inventory of heifers in feedlots was up 7.7% from last year, a large enough value to suggest further slowing in heifer retention, but down compared to the double-digit year over year increases of the previous four quarters,” Peel says.