Cattle futures closed sharply lower Friday, with correction, pressure from lower outside markets and week-end positioning.
Live cattle futures closed an average of $3.10 lower. Feeder Cattle futures closed an average of $4.86 lower.
Week to week on Friday, Live Cattle futures closed an average of $3.28 lower. Feeder Cattle futures closed an average of $2.97 lower during the same period.
Negotiated cash fed cattle trade ranged from moderate on moderate demand in Nebraska to limited on moderate demand elsewhere through Friday afternoon, according to the Agricultural Marketing Service.
For the week, FOB live prices were $3 higher in the Texas Panhandle at $235/cwt., mostly steady in Kansas at mainly $235, steady to $2 lower in Nebraska at $240-$242 and steady to $1 lower in the western Corn Belt at $240-$241. Dressed delivered prices were steady at $380.
Choice boxed beef cutout value was $1.16 higher Friday afternoon at $377.88. Select was 43¢ higher at $363.50. Week to week on Friday, Choice was $12.80 higher and Select was $6.77 higher.
Estimated total cattle slaughter last week of 558,000 head was 24,000 head fewer than the previous week and 57,000 head fewer than the same week last year. Year-to-date total cattle slaughter of 13.5 million head was 893,000 head fewer (-6.2%) than the same time last year. Year-to-date beef production of 11.7 billion pounds was 354.5 million pounds less (-2.9%).
Turning to row crops, Soybean futures led the grain complex higher Friday, fueled by the EPA’s proposed Renewable Volume Obligations for biomass-based diesel in the Renewable Fuels Standard.
Soybean futures closed mostly 20¢ to 28¢ higher. Kansas City Wheat futures closed 15¢ to 18¢ higher. Corn futures closed mostly 1¢ to 2¢ higher.
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Major U.S. financial indices sagged Friday beneath the weight of worries caused by increased fighting between Israel and Iran, as well as the related spike higher in Crude Oil futures.
The Dow Jones Industrial Average closed 769 points lower. The S&P 500 closed 68 points lower. The NASDAQ was down 255 points.
West Texas Intermediate Crude Oil futures (CME) closed $3.09 to $4.94 higher through the front six contracts.
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Reduced packer production, seasonal strength and resilient consumer beef demand continue pushing wholesale beef values to new record-high levels.
Choice boxed beef cutout is $34/cwt. higher than the beginning of May and $60 higher year over year, according to Andrew P. Griffith, agricultural economist at the University of Tennessee, in his weekly market comments.
“Packers have been forced to keep pushing wholesale beef prices higher, but the consumer has not demonstrated much resistance to such price increases despite beef production remaining similar to year-ago levels,” Griffith explains. “There will come a day when beef production declines relative to the previous year, which should push beef prices higher from a theoretical standpoint. The question is if prices will actually push higher, and if so, how high will they go when beef production declines?”