Cattle Current Daily-July 26

Cattle Current Daily-July 26

Support included the monthly Cold Storage report released earlier this week (see below), as well as another day of stable to higher wholesale beef values.

Live Cattle futures closed an average of $1.26 lower (70¢ to $1.62 lower).

Feeder Cattle futures closed an average of $1.27 lower ($1.07 to $1.92 lower), except for an average of 33¢ lower in the back two contracts.

Choice boxed beef cutout value was 16¢ higher Tuesday afternoon at $207.62/cwt. Select was $1.04 higher at $198.93. At $8.69, the Choice-Select spread was the narrowest since April.

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Major U.S. financial indices closed sharply higher on Tuesday, boosted by stronger than expected quarterly earnings from folks like McDonalds and Caterpillar, as well as another day of rising oil prices.

The Dow Jones Industrial Average closed 100 points higher. The S&P 500 closed up 7 points at a new record high. The NASDAQ closed 1 points higher.

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After spending all of May and June above $16/cwt. ($16.17 to $30.92), the Choice-Select spread narrowed to less than $10 for the past two days—the least since April.

The widening and narrowing of the spread was mainly due to demand factors as opposed to supply factors,” says Andrew P. Griffith, agricultural economist at the University of Tennessee, in his weekly market comments. “Since April, the weekly percentage of beef grading Choice has ranged from 69.8% to 73.2% and it is difficult to see much correlation between percent of beef grading Choice and the Choice-Select spread over that time. From the demand standpoint, consumers were hungry for middle meats, as was the export market during May and June. However, domestic consumers have shifted focus to ground beef as is evidenced by the price increase in fresh 90% lean beef from $218 to $233 (7% increase).”

 

2017-07-25T19:37:01+00:00

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