Cattle feeders won the battle last week in late trade. Live prices were $1 higher at $106/cwt., except for $2 higher in the western Corn Belt at $105-$107. Dressed trade was generally steady at $165-$168.
The CME Feeder Cattle Index edged above $150.00 for the first time since early August.
Live Cattle futures closed mostly marginally higher on Monday (12¢ to 65¢ higher) except for 17¢ lower in spot Oct, 25¢ lower in Feb and unchanged in Aug.
Feeder Cattle futures closed an average of $1.09 higher (57¢ to $1.47 higher).
Choice boxed beef cutout value was $1.20 higher Monday afternoon at $192.62/cwt. Select was $1.85 higher at $187.70.
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Major U.S. financial indices closed higher again on Monday, helped along by Northrup Grumman’s multi-billion acquisition of Orbital ATK.
The Dow Jones Industrial Average closed 63 points higher. The S&P 500 closed 3 points higher. The NASDAQ closed 6 points higher.
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“Although improved forage conditions in the Southern Plains may increase incentives to background calves, placements in feedlots during the fourth quarter are expected to remain relatively large, given the availability of cattle outside feedlots,” say analysts with USDA’s Economic Research Service (ERS), in the monthly Livestock, Dairy and Poultry Outlook released yesterday. “However, expected declines in cattle feeding margins will likely encourage feedlots to bid down the price of calves in the coming months.”
The projected fourth-quarter 5-area fed steer price is $107-$113/cwt.
“Fed steer prices may possibly be pressured in the short-term as ample supplies of cattle are available to be marketed in the fourth quarter. In addition, an abundant supply of competing meats are also available,” ERS analysts say.
Fed steer prices are forecast at $110-$120 in the first quarter of 2018.
In the meantime, those analysts suggest improved forage conditions—allowing folks to keep cattle and wait for higher prices—are helping lift feeder cattle prices, following the month-to-month decline in August.
The price forecast for feeder steers (750-800 lbs.) in the fourth quarter is $140-$146/cwt. First-quarter prices are projected at $132-$140.