Cattle Current Daily-Nov. 7, 2018

Cattle Current Daily-Nov. 7, 2018

Cattle futures stabilized Tuesday, retaining the previous session’s steep losses, but holding ground. Trade was light with many apparently remaining on the sidelines to see the election results.

Live Cattle futures closed narrowly mixed (37¢ lower to 20¢ higher).

Other than 47¢ and 17¢ higher in the front two contracts, Feeder Cattle futures closed an average of 20¢ lower.

Wholesale beef values were steady on Choice and sharply higher on Select, with moderate to good demand and moderate offerings, according to the Agricultural Marketing Service.

Choice boxed beef cutout value was 17¢ higher Tuesday afternoon at $218.76/cwt. Select was $2.31 higher at $204.66.

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Major U.S. financial indices closed higher Tuesday with investors awaiting the outcome of mid-term elections.

The Dow Jones Industrial Average closed 173 points higher. The S&P 500 closed 17 points higher. The NASDAQ was up 47 points.

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“Yearling cattle ready for the feedlot remain in strong demand and will likely do so through the end of the year and into 2019,” says Andrew P. Griffith, agricultural economist at the University of Tennessee, in his weekly market comments.

As for calves, Griffith says it’s reasonable to assume that prices will decline another 2-3% in November.

“The slaughter cow market further exacerbates the situation,” Griffith explains. “Good-conditioned slaughter cows weighing 1,300 lbs. would have resulted in about $560 per head this week based on weekly auction averages (TN), which is about $120 per head lower than what the same cows averaged in September. These value losses are sometimes phantom losses because many producers do not consider what could have been attained during a different marketing period.”

On the other end of the scale, Griffith points to seasonally higher wholesale beef values, which should provide support to fed cattle.

“Stronger beef prices generally result in packers being willing to pay higher money for finished cattle but they continue to fight with cattle feeders to maintain those strong margins,” Griffith says. “The price increase in wholesale beef was to be expected as holiday buying is underway, but beef demand continues to impress and further support prices.”

2018-11-06T18:59:44-05:00

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