Cattle Current—Jan. 8, 2020

Cattle Current—Jan. 8, 2020

Cattle futures retraced some ground from the previous session’s strong and somewhat surprising rally, but kept the lion’s share of gains.

Live Cattle futures closed an average of 57¢ lower.

Feeder Cattle futures closed an average of 80¢ lower (40¢ lower to $1.52 lower in spot Jan).

Wholesale beef values were steady on moderate demand and heavy offerings, according to the Agricultural Marketing Service.

Choice boxed beef cutout value was 9¢ lower Monday afternoon at $209.56/cwt. Select was 2¢ higher at $206.82.

Corn futures closed unchanged to fractionally mixed.

Soybean futures closed mostly unchanged to 1¢ lower through Mar ’21 and then fractionally higher to 2¢ higher.

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Major U.S. financial indices closed lower Tuesday, with most of the investor unease seeming to stem from uncertainty around recently escalated tensions with Iran.

The Dow Jones Industrial Average closed 119 points lower. The S&P 500 closed 9 points lower. The NASDAQ was down 2 points.

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The weighted 5-area average live steer (FOB) price in December was $120/cwt., which was $4.65 more than the previous month and 64¢ more than the same time a year earlier, according to USDA. In the beef (delivered), the average weighted price was $191.18, which was $9.27 more than the previous month and $2.81 more than a year earlier.

“Fed cattle prices tend to increase seasonally from late summer lows to the end of the year. It’s also not uncommon for prices to weaken between Thanksgiving and Christmas, and again in February, before the spring rally,” says David Anderson, Extension livestock economist at Texas A&M University.

In the latest issue of In the Cattle Markets, Anderson explains the five-year (2013-17) average price increase during the fall rally was $11/cwt. or 8.8%. It was $15 in 2018 for an increase of 14%. In 2019, though, fed cattle prices increased by $22 or 22.6%.

What’s more, Anderson points out, “Fed cattle movement ramped up in December with total steer and heifer slaughter up about 5%. It’s worth noting the reopening of the fed cattle plant (Tyson) in early December. That has contributed to packer demand for fed cattle, helping to boost fed cattle prices and slaughter….All cow slaughter was up almost 7%. All of the increase in cow slaughter during the quarter came from beef cows, as dairy slaughter declined from a year ago.”

2020-01-07T21:45:16-06:00

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