Cash fed cattle trade for the week had yet to develop through Thursday afternoon. There were a few dressed trades at $168/cwt.—the upper end of last week’s range—in Nebraska, but too few to trend.
Although fundamentals remained unchanged, Cattle futures settled mostly modestly lower on Thursday, after early support, then significant pressure, followed by easing pressure.
Other than 5¢ lower in the back contract, Live Cattle futures closed an average of 55¢ lower (27¢ to $1.07 lower).
Other than 20¢ higher in spot Sep and 2¢ lower in Oct, Feeder Cattle futures closed an average of 39¢ lower (25¢ to 47¢ lower).
Choice boxed beef cutout value was 60¢ higher Thursday afternoon at $191.00/cwt. Select was $1.97 lower at $186.72.
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Major U.S. financial indices closed narrowly mixed on Thursday.
The Dow Jones Industrial Average closed 45 points higher. The S&P 500 closed 2 points lower. The NASDAQ closed 31 points lower.
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“Cow-calf producers that are set-up to economically add some weight to cull cows and then sell in the first few months of 2018 instead of this fall at the seasonal price low, might want to put a pencil to that soon,” say analysts with the Livestock Marketing Information Center (LMIC), in the latest Livestock Monitor.
LMIC analysts explain that over the course of a typical cattle inventory cycle (usually 10-12 years), cull cow prices are typically seasonally lowest in the fourth quarter—about a 10% decline between September and November for the long-term average.
“Several factors underpin the seasonal pattern in cull cow prices,” LMIC analysts explain. “First, the supply of cull beef cows is largest in the fall, which dampens prices; after those large supplies are marketed, prices increase. Second, fed cattle prices are typically highest in the winter and early spring months (i.e., February through May), which supports slaughter cow prices. Other factors that can significantly influence cull cow prices are the level of dairy cow slaughter and the amount of beef imported from Australia and New Zealand, which competes mostly in the cow-beef market and not as much with meats from fed steers and heifers.”
LMIC expects the average seasonal decline in cull cow prices through the fourth quarter this year, then an increase into early 2018. Along the way, they expect cull cow prices to be lower year over year.