Feeder Cattle futures continued to gain ground on Tuesday with support from recent cash markets, lending support to Live Cattle. Plenty of folks will be looking for a hint of direction from this morning’s weekly Fed Cattle Exchange auction.
Live Cattle futures closed an average of 51¢ higher through the front four contracts and then an average of 20¢ higher.
Feeder Cattle futures closed an average of 70¢ higher.
Choice boxed beef cutout value was 51¢ lower Tuesday afternoon at $192.11/cwt. Select was $1.13 higher at $188.83.
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Major U.S. financial indices closed higher again on Tuesday, with few expecting the Fed to raise interest rates this week, and shrugging off increased geopolitical tension with North Korea.
The Dow Jones Industrial Average closed 39 points higher. The S&P 500 closed 2 points higher. The NASDAQ closed 6 points higher.
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“Buyer interest in preconditioned calves is expected to continue to grow as increases are realized in calf prices and the cost to finish cattle,” says Brenda Boetel, Extension economist at the University of Wisconsin-River Falls. “In the current environment, preconditioning may become even more important, not necessarily due to the premium received for preconditioning, but because the cow-calf producer can avoid the discount received for calves with the unknown health status of non-preconditioned calves.”
Last fall’s wreck comes to mind: it was difficult to peddle un-weaned calves for any price.
With that said, in the most recent issue of In the Cattle Markets, Boetel explains there’s lots to consider in deciding whether or not it makes economic sense to keep calves a spell. For instance: how much weight calves can gain and the value of gain of those added pounds, versus the cost of gain.