Cattle futures closed higher Friday, helped along by more bullish outside markets, indications of stronger cash trade and perhaps added confidence from the resolution to the dock strikes, at least for now.
Live Cattle futures were an average of 63¢ higher. Feeder Cattle futures were an average of $1.48 higher (45¢ to $2.25 higher). Week to week on Friday, Live Cattle futures were an average of $2.97 higher and Feeder Cattle futures were an average of $3.78 higher.
Negotiated cash fed cattle trade and demand were moderate in the Southern Plains through Friday afternoon, according to the Agricultural Marketing Service. FOB live prices were $1 higher at $186/cwt.
Elsewhere, trade was slow on light demand with too few transactions to trend.
Last week FOB Live prices were mostly $187 in Nebraska and $186-$187 in the western Corn Belt. Dressed delivered prices were $292-$294.
Choice boxed beef cutout value was $2.78 higher Friday afternoon at $302.58/cwt. Select was $4.32 higher at $287.61.
Estimated total cattle slaughter last week of 611,000 head was 1,000 head fewer than the previous week and 16,000 head fewer than the same week last year. Estimated year-to-date total cattle slaughter of 23.9 million head was 950,000 head fewer (-3.8%) than the same period a year earlier. Estimated year-to-date beef production of 20.2 billion pounds was 150.1 million pounds less (-0.7%).
Grain and Soybean futures closed lower again Friday with harvest pressure.
Corn futures closed 2¢ to 4¢ lower. Kansas City Wheat futures closed 11¢ to 13¢ lower. Soybean futures closed 7¢ to 8¢ lower.
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Major U.S. financial indices closed higher Friday, buoyed by a monthly jobs report that far exceeded expectations.
Total non-farm payroll employment increased by 254,000 in September, leaving the unemployment rate little changed at 4.1%, according to the U.S. Bureau of Labor Statistics.
In September, average hourly earnings for all employees on private non-farm payrolls increased by 13¢ to $35.36.
The Dow Jones Industrial Average closed 341 points higher. The S&P 500 closed 51 points higher. The NASDAQ was up 219 points.
Through mid-afternoon, West Texas Intermediate Crude Oil futures on the CME closed 1¢ to 67¢ higher through the front six contracts.
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Calves and feeder cattle traded mainly steady to higher at last week’s auctions monitored by Cattle Current, supported by stronger Cattle futures.
Overall, though, Andrew P. Griffith, agricultural economist at the University of Tennessee notes there are several factors working against calf prices currently.
“There are a few factors working against calf prices at the moment,”
“The first is clearly the seasonal trend associated with a large number of calves being weaned and marketed during the fall months,” Griffith explains, in his weekly market comments. “The second is the increased incidence of morbidity and mortality associated with the drastic temperature swings that will soon come into play. Third is the widespread drought conditions in many parts of the country.”
Approximately 70% of the continental United States is experiencing abnormally dry or drought conditions, according to the current U.S. Drought Monitor. That’s 12% more than a year ago.
Conversely, Griffith notes competition for declining calf supplies will add price support.
“It will not just be stocker producers and backgrounding operations competing for these animals. There will be feedlots looking to place calves on feed at lighter weights as they look to fill pens,” Griffith explains. “With the decline in feed prices and reduced availability of yearling cattle, feedlot managers will be looking for a way to fill the pens and keep them filled for a longer period of time.”