Negotiated cash fed cattle trade remained undeveloped in the North through Friday afternoon, based on USDA reports. Although there were too few transactions to trend, a few live sales in the western Corn Belt were at $112-$114/cwt. and a few dressed sales in Nebraska were at $180. Compared to the previous week, that was $2-$4 higher on a live basis and $5 higher in the beef.
Furthermore, USDA’s Direct Slaughter Cattle Reporting Dashboard tallied 12,560 head of steers and heifers Friday (live and dressed), with the average steer price at $113.70 on a live basis and $177.04 in the beef.
For the week, live sales in the Southern Plains were $2 higher at $112/cwt.
Stronger cash prices and the recent surge in wholesale beef values helped Cattle futures rally on Friday.
Not counting 40¢ lower in newly minted away April, Live Cattle futures closed an average of $1.55 higher ($1.07 higher to $2.30 higher in spot Dec).
Feeder Cattle futures closed an average of $1.94 higher ($1.32 to $2.72 higher).
Wholesale beef values were higher on moderate to good demand and offerings, according to the Agricultural Marketing Service.
Choice boxed beef cutout value was $1.02 higher Friday afternoon at $233.20/cwt. Select was also $1.02 higher at $207.51.
Corn futures closed mostly fractionally lower.
Soybean futures closed 3¢ to 7¢ higher through Aug. ’20 and then mostly 1¢ lower.
Major U.S. financial indices closed higher Friday, buoyed by a strong monthly employment report.
Total non-farm payroll employment increased by 128,000 in October, according to the U.S. Bureau of Labor Statistics. That was significantly more than expectations. The unemployment rate was little changed at 3.6%. The average hourly earnings of all employees on non-farm payrolls increased 6¢ to $28.12. Average hourly earnings are 3.0% higher over the last 12 months.
Crude oil rallied with West Texas Intermediate (CME) up $1.80 to $2.02 higher through the front 12 contracts.
The Dow Jones Industrial Average closed 301 points higher. The S&P 500 closed 29 points higher. The NASDAQ was up 94 points.
Choice boxed beef cutout value was $233.20/cwt. Friday, the highest since August—about a week after the Tyson fire. That was $14.65 more (+6.7%) than a year earlier. At $207.52 on Friday, Select was $3.27 more (+1.6%) more. The Choice-Select spread was 79.6% higher (+$11.39) at $25.69.
“Most of the strength in cutout prices right now is coming from the rib and brisket primal, with slight support from the chuck and round,” says Andrew P. Griffith, agricultural economist at the University of Tennessee, in his weekly market comments. “The chuck and round will bear more of the burden of supporting the cutout value moving through the winter months.”
Griffith also notes 90%-lean beef prices remain strong, despite seasonal fourth-quarter pressure.
“Current prices are about 16% above where they were this time one year ago, but they are slightly lower than the five-year average price for the beginning of November,” Griffith says.