Negotiated cash fed cattle trade remained undeveloped through Wednesday afternoon. Depending on the snugness of packer inventories, odds appear to favor at least steady money.
There were only 528 head offered in the weekly Fed Cattle Exchange auction. No takers.
Cattle futures continued to putter along, holding on to most of last week’s gains, closing narrowly mixed to a touch lower and awaiting cash direction.
Live Cattle futures closed unchanged to an average of 10¢ lower.
Feeder Cattle futures closed from 42¢ lower to 50¢ higher.
Wholesale beef values were lower on light to moderate demand and moderate to heavy offerings, according to the Agricultural Marketing Service.
Choice boxed beef cutout value was $1.04 lower Wednesday afternoon at $204.25/cwt. Select was $1.29 lower at $194.18.
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Major U.S. financial indices closed mixed Wednesday, with bank shares pushing the Dow higher with support from the higher 10-year treasury yield.
The Dow Jones Industrial Average closed 158 points higher. The S&P 500 closed 3 points higher. The NASDAQ was down 6 points.
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“Feeder cattle prices have shown strength through the summer, but seasonal pressures will likely take hold, moving prices lower in the fourth quarter,” say analysts with USDA’s Economic Research Service (ERS), in the latest monthly Livestock, Dairy and Poultry Outlook. “Prices typically decrease when the spring-born calves (about two-thirds of the annual calf crop) are brought to market in the fall. Assuming normal weather in the Great Plains, availability of winter forages for backgrounding could bolster prices in fourth-quarter 2018.”
Prices for the rest of this year and next were forecast slightly higher than the previous month at $148-$151/cwt. in the third quarter; $143-$151 in the fourth quarter; $139-$151 for the 2019 annual price, based on lower projected corn prices.
“Regarding fed cattle prices in second-half 2018, feedlots seem to have resisted recent lower prices from packers, which may be reflected in a greater proportion of cattle on feed over 120 days. To the extent these cattle are remaining on feed longer as producers respond to the prospects of higher future prices, there could be a shift of some marketings from the third quarter to the fourth,” say ERS analysts. “The fed steer price forecast for the 5-area marketing region in third-quarter of 2018 is $108-$111/cwt., but the fourth-quarter forecast is lowered to $108-$114/cwt., in line with expectations of increased marketings.”