Negotiated cash fed cattle trade ended last week $1-$3 higher: mainly $111.00-$111.50 on a live basis and $175 in the beef.
Feeder Cattle futures wandered to a mostly higher close on Friday, while Live Cattle settled mostly marginally mixed as traders bided their time for the next week.
Other than 47¢ and 22¢ higher on either end of the board, Live Cattle futures closed marginally mixed (15¢ lower to 5¢ higher).
Other than 5¢ and 7¢ lower at the back of the board, Feeder Cattle futures closed an average of 55¢ higher (32¢ to 80¢ higher).
Choice boxed beef cutout value was 78¢ higher Friday afternoon at $198.22/cwt. Select was 60¢ higher at $190.05.
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Major U.S. financial indices edged higher on Friday, basically regaining ground lost in the previous session. Some of the optimism stemmed from a strong start to quarterly earnings reports.
The Dow Jones Industrial Average closed 30 points higher. The S&P 500 closed 2 points higher. The NASDAQ closed 14 points higher.
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“Some may be asking themselves why feeder cattle prices remain elevated given the increased number of cattle, the expectation for increased meat production in the beef, pork, and poultry sectors, and relatively low finished cattle prices,” says Andrew P. Griffith, agricultural economist at the University of Tennessee, in his weekly market comments. Among the reasons Griffith cites:
- “…Low corn prices, which result in relatively low feed costs. December corn futures prices have been hanging around $3.50/bu. for two months now. Given expected corn production this year, there is little concern of corn prices rallying to the upside. Additionally, the cash corn price in many cattle feeding states is closer to $3 given the highly negative basis…”
- “The February and April live cattle futures prices are trading in the $121 to $122 range, which provides cattle feeders the opportunity to bid current levels for feeder cattle. Some cattle feeders may be even betting on stronger prices in the spring, which makes them feel like they are getting a good deal at today’s feeder cattle prices.”
- “Last but not least, beef demand domestically and internationally remains strong which is supporting prices.”