Cattle Current Daily-Oct. 30, 2018

Cattle Current Daily-Oct. 30, 2018

Cattle futures settled mainly narrowly mixed on Monday, unable to build on last week’s strong cash markets and the seasonal uptick in wholesale beef values. Though trade was light, some analysts pinned part of the weakness on shifting fund positions, from the long side.

Live Cattle futures closed mostly narrowly mixed (from an average of 73¢ lower in three contracts to an average of 24¢ higher).

Except for 90¢ lower in spot Nov, Feeder Cattle futures closed narrowly mixed (25¢ lower to 15¢ higher).

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

Choice boxed beef cutout value was 29¢ higher Monday afternoon at $213.76/cwt. Select was $2.28 higher at $201.11.

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Major U.S. financial indices closed sharply lower again on Monday, amid a volatile day of trading with pressure from tech stocks and continuing trade worries, relative to China.

The Dow Jones Industrial Average closed 245 points lower. The S&P 500 closed 17 points lower. The NASDAQ was down 116 points

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Higher costs—including winter feed, fuel, utilities and interest—along with lower cull cow prices are pressuring cow-calf returns this year, according to the Livestock Marketing Information Center (LMIC).

“On a per cow basis, cash return for 2018 is expected to be slightly negative (about -$10 per cow),” say LMIC analysts, in the latest Livestock Monitor. “Last year had a positive return over cash costs, due to calf prices that strengthened during the second half of the year. Estimated loss per cow in 2018 was smaller than 2016’s. The preliminary 2019 LMIC forecast is for positive returns over cash costs. That situation may further improve in 2020.”

For context, LMIC emphasizes their annual calculations are for market analysis; they don’t reflect any individual operation.

“The estimates only incorporate cash production costs plus pasture rent. A commercial size herd that weans and sells calves in the fall is assumed,” LMIC analysts explain. “…These estimates are best interpreted in a broad context, focusing on the direction of change.”

2018-10-29T23:43:09+00:00

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