Cattle futures plumbed lower Friday, with continued concern about a potential strike at the JBS packing plant in Greeley, Colo., lower cash fed cattle prices, bearish outside markets, as well as month-end profit taking and technical selling.
Live Cattle futures were an average of $3.49 lower. Feeder Cattle futures were an average of $7.51 lower.
Week to week on Friday, Live Cattle futures closed an average of $6.30 lower ($2.57 lower in expiring Feb to $9.77 lower). Feeder Cattle futures closed an average of $12.88 lower.
Negotiated cash fed cattle ranged from moderate on light to moderate demand in the Texas Panhandle to moderate on moderate demand elsewhere through Friday afternoon, according to the Agricultural Marketing Service.
For the week, FOB live prices were $5 lower in the Southern Plains at $244/cwt. and $4-$5 lower in the western Corn Belt at $240-$243. Prices in Nebraska the previous week were $247-$248.
Dressed delivered prices were $5 lower in Nebraska at $383. The previous week, prices were $388 in the western Corn Belt.
Choice boxed beef cutout value was $1.95 higher Friday afternoon at $379.84/cwt. Select was $3.52 higher at $374.31. Week to week on Friday, Choice was $13.14 higher at $379.84/cwt. and Select was $13.57 higher.
Estimated total cattle slaughter last week of 516,000 head was the same as the previous week but 53,000 head fewer than the same week last year. Total year-to-date estimated cattle slaughter of 4.5 million head was 501,000 head fewer (-10.1%) than the same week last year. Estimated year-to-date beef production of 4 billion pounds was 342.3 million pounds less (-7.9%).
Wheat futures led the grain complex ahead on Friday, closing 10¢ to 21¢ higher on short covering tied to weather concerns in India.
Corn futures were 2¢ to 5¢ higher through near Dec and then mostly 1¢ higher.
Soybean futures were 4¢ to 9¢ higher through near Aug and then mostly 1¢ lower to 1¢ higher.
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Major U.S. financial indices closed lower Friday with likely month-end and week-end position squaring, along with pressure from a more bearish inflation reading than expected.
The Producer Price Index for final demand increased 0.5% month to month in January on a seasonally adjusted basis, according to the U.S. Bureau of Labor Statistics. Excluding food and energy, prices increased 0.8%.
The Dow Jones Industrial Average closed 521 points lower. The S&P 500 closed 29 points lower. The NASDAQ was down 210 points.
Through mid-afternoon, West Texas Intermediate Crude Oil futures (CME) were $1.39 to $1.81 higher through the front six contracts.
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Calves and feeder cattle sold mixed, but mainly steady to lower at the auctions monitored by Cattle Current last week, especially later as Cattle futures declined. Growing demand for replacement heifers was evident at many auctions.
These comments from Agricultural Marketing Service (AMS) reporters capture the week-end flavor.
“Demand for grass cattle was very good … Buyers looking for grass heifers dipped into the light end of replacement heifers in order to buy high quality cattle. This class of cattle showed the largest increase in value week over week,” according to the AMS reporter at Public Auction Yards in Billings, MT on Friday. “Cattle too big to go to grass were the soft part of the sale as lighter offerings made putting together loads of like- quality cattle difficult. Additionally, CME positions sold off sharply today which put some pressure on this class of cattle.”
Likewise, the AMS reporter at Herreid Livestock Auction in South Dakota on Friday noted, “Very good demand for backgrounding or grass type cattle today, good to very good demand for finishing type cattle depending on flesh condition and very good demand for replacement heifers.”
A day earlier, at Cattlemen’s Livestock Auction in Dalhart, Texas, the AMS reported explained, “Wheat cattle may continue to come to town as the weather warms up and not much chance of precipitation in the near future. Grass fires have plagued the area recently with the continuing dry weather and plenty of fuel left over from this last summer.”
While grass cattle will likely continue to command the strongest demand headibg into March, Andrew P. Griffith, agricultural economist at the University of Tennessee, points out in his weekly market comments feeder cattle prices have a seasonal tendency to weaken.
“The softening of feeder cattle prices in March correlates with finished cattle prices six months down the road when those cattle will come off feed in early fall. These are months with softer finished cattle prices,” Griffith explains.