Cash fed cattle trade was still undeveloped for the week through mid Friday afternoon. There was a few trades on either side of steady during the week, but too few transactions to trend. Prices the previous week were mainly $105 per cwt on a live basis and $165-$168 in the beef.
Cattle futures closed higher on Friday, apparently buoyed by hopes for stronger cash fed cattle prices and lingering thoughts that the bottom is near.
Other than 2¢ lower in the back contract, Live Cattle futures closed an average of $1.01 higher through the front four contracts and then an average of 46¢ higher.
Feeder Cattle futures closed an average of $1.12 higher (92¢ to $1.42 higher).
Choice boxed beef cutout value was 42¢ higher Friday afternoon at $191.42/cwt. Select was 87¢ lower at $185.85.
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Major U.S. financial indices closed higher on Friday as investors ignored anything that might otherwise be considered negative, like a decline in retail sales and industrial production.
After six consecutive months of gains, industrial production declined 0.9% in August, according to the Federal Reserve, reflecting, in part, the impact of Hurricane Harvey.
Retail and food service sales declined 0.2% in August from the previous months, according to the U.S. Department of Commerce.
The Dow Jones Industrial Average closed 64 points higher. The S&P 500 closed 4 points higher. The NASDAQ closed 19 points higher.
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“It is fairly clear to see at this point that the last official grilling holiday of the summer did little to spur boxed beef prices,” says Andrew P. Griffith, agricultural economist at the University of Tennessee, in his weekly market comments. “…With the large quantity of beef being produced and placed on the meat counter, coupled with transitioning out of the grilling season, a sudden price escalation is unlikely.”
At least retail beef prices are trending lower. The Choice retail beef price last months was 13¢ lower than the previous month at $5.97/lb., according to Griffith. The all-fresh retail beef price was just 2¢ lower at $5.79.
“Retail beef prices are likely to soften the next two to three months as the market moves through the large quantities of beef and as the market moves through large quantities of pork,” Griffith says. “If the domestic market is forced to absorb the increased meat production then lower prices can be expected.”