Cattle Current Daily-July 30, 2018

Cattle Current Daily-July 30, 2018

Cattle futures closed narrowly mixed on Friday. Support in the front months appeared to be a product of short covering and month-end position squaring, as much as anything. Pressure included uncertainty regarding the cash market, as well as the continued slide in Lean Hog futures, tied to trade disputes with China and Mexico.

Live Cattle futures closed an average of 58¢ higher in the front four contracts (5¢ higher to $1.10 higher), and then an average of 21¢ lower.

Except for 87¢ higher and 35¢ higher in the front two contracts, Feeder Cattle futures closed an average of 31¢ lower.

Boxed beef cutout values were steady on moderate demand and offerings, according to the Agricultural Marketing Service.

Choice boxed beef cutout value was 23¢ higher Friday afternoon at $205.14/cwt. Select was unchanged at $198.27. 

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Major U.S. financial indices closed lower Friday, led by tech stocks, including Intel and Twitter. That was despite robust second-quarter GDP of 4.1% reported by the U.S. Bureau of Economic Analysis. GDP was up 2.2% in the first quarter.

The Dow Jones Industrial average closed 76 points lower. The S&P 500 closed 18 points lower. The NASDAQ was down 114 points.

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“Boxed-beef values are sitting at the crossroads, as it appears they have put in a summer low,” say analysts with USDA’s Agricultural Marketing Service. 

If so, it ends nine consecutive weeks of declining Choice boxed beef cutout values.

During that time, Choice boxed beef cutout values declined more than $27/cwt., according to Andrew P. Griffith, agricultural economist at the University of Tennessee, in his weekly market comments.

“Current prices are still slightly below prices from the same week one year ago, but they have shown considerable strength compared to last year,” Griffith says. “Looking at prices from 2017, the Choice cutout peaked at nearly $251 in the middle of June and collapsed to $191 in the middle of September, which is a loss of $60. Thus, the decline in 2018 has only been 45% of the summer decline in 2017. Historical price data would imply there is still potential for downside price risk in the wholesale beef market. However, if packers can hold current prices or push them higher next week, then the risk may be very small.”

2018-07-28T14:03:38-05:00

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