Cattle futures got some spark Tuesday—especially Feeder Cattle— credited in part to oversold conditions.
Other than unchanged in the back contract, Live Cattle futures closed an average of 57¢ higher.
Except for 60¢ higher in spot Nov, Feeder Cattle futures closed an average of $2.12 higher ($1.32 to $3.15 higher).
Wholesale beef values were lower on light to moderate demand and moderate offerings, according to the Agricultural Marketing Service.
Choice boxed beef cutout value was $1.47 lower Tuesday afternoon at $214.08/cwt. Select was $1.41 lower at $198.98.
Major U.S. financial indices tried but failed on Tuesday to regain steep losses from the previous session. Along with tech stocks, the continuing decline in crude oil prices continued to weigh on the market.
West Texas Intermediate Crude Oil futures (CME) closed $4.02 to $4.24 lower through next November. Spot Dec closed at $55.69. It was $71.18 a month ago; $76.24 about six weeks ago. At least part of the recent slide in prices has to do with increased production by OPEC countries and the softer outlook for global economic growth.
The Dow Jones Industrial Average closed 100 points lower. The S&P 500 closed 4 points lower. The NASDAQ was just a tick to the positive side.
Consumer spending for food and beverages (purchased for off-premises consumption—mainly grocery stores) increased 2.8% and 4.0% in the spring and summer quarters, respectively, according to analysts with the Livestock Marketing Information Center (LMIC).
Those increases fall into the middle range of growth for this sector during the last two years,” say LMIC analysts, in the latest Livestock Monitor. “Meanwhile, the spending category of ‘food services and accommodations’ jumped 8.1% and 6.9% during the spring and summer quarters, capturing the preference for away-from-home meals (e.g., restaurants).”
For overall context, the LMIC folks explain the net value of goods and service produced by the U.S. economy increased by an annual rate of 3.5% in the summer quarter and by 4.2% in the spring quarter.
“Wholesale market measures of beef demand were consistent with trends in consumer spending choices,” LMIC analysts say. “The Choice beef cutout this summer was up 3% from a year ago, even as beef supplies from steers and heifers increased by 0.5%. More product selling at a higher price is the essence of favorable demand. Impressive export growth also played a role in this situation.”