Cattle futures stabilized Friday to end a week of massive declines.
Feeder Cattle futures closed an average of $1.50 higher (72¢ to $1.97 higher). Week to week on Friday, they were an average of $13.13 lower ($10.87 to $13.90 lower).
Live Cattle futures closed narrowly mixed, from 25¢ lower to 17¢ higher. Week to week on Friday, they were an average of $9.48 lower ($8.20 to $10.90 lower).
Negotiated cash fed cattle trade ranged from limited on light demand to a standstill through Friday afternoon, with too few transactions to trend, according to the Agricultural Marketing Service.
For the week, FOB live prices were $4 lower in the Texas Panhandle at $181/cwt., $5 lower in Kansas at $180, $3.50 lower in Nebraska at $181.50 and $5-$7 lower in the western Corn Belt at $178-$180. Dressed delivered prices were $5 lower in Nebraska at $287 and $5-$9 lower in the western Corn Belt at $283-$287.
Choice boxed beef cutout value was $1.04 higher Friday afternoon at $300.46/cwt. Select was $2.00 lower at $267.42/cwt.
Estimated total cattle slaughter last week of 618,000 head was 14,000 fewer than the previous week and 52,000 less than the same week last year. Estimated year-to-date cattle slaughter of 28 million head was 1.4 million head fewer (-4.7%) than the same time last year. Estimated year-to-date beef production of 23 billion pounds was 1.3 billion pounds less (-5.3%).
Turning to row crops, Corn futures closed 2¢ to 4¢ lower. KC HRW Wheat closed 7¢ to 9¢ lower. Soybean futures closed 2¢ to 5¢ higher through May ’24 and then mostly 1¢ to 3¢ lower.
Major U.S. financial indices closed higher Friday as Treasury yields stabilized.
The Dow Jones Industrial Average closed 391 points higher. The S&P 500 closed 67 points higher. The NASDAQ was up 276 points.
West Texas Intermediate Crude Oil futures (CME) closed $1.22 to $1.43 higher through the front six contracts.
Potentially, the plateau for wholesale beef prices is etched at approximately $300/cwt., for Choice.
“Since the beginning of June, the wholesale Choice boxed beef price has traded below $300 per hundredweight six days with three of those days occurring this week,” says Andrew P. Griffith, agricultural economist at the University of Tennessee, in his weekly market comments. “From 30,000 feet, it appears the market is not willing to move too far from the $300 price point in either direction.”
If that proves to be the case, then it is another clear indicator of domestic consumer demand strength, given the historically high price level. Such a price plateau could also explain why prices have yet to increase as seasonally expected.
“Consumers have been burdened by inflation and rising interest rates, which pulls disposable income towards goods other than beef. Thus, the ability to push beef prices higher will be an uphill battle despite strong beef demand,” Griffith says. “From an economic terms standpoint, the market will most likely see a shift along the demand curve as prices change instead of shifting the demand curve.”
For instance, Griffith points out demand for Prime grading beef remains intact, trading for $30-$40/cwt. more than Choice since the middle of July.