Sharply lower outside markets, more apparent non-commercial long liquidation and continued bearishness about increased harvest supplies a few weeks down the road helped pressure Cattle futures on Monday.
Except for 60¢ lower at the back of the board, Live Cattle futures closed an average of $1.27 lower ($1.05 to $1.62 lower).
Except for 40¢ lower at the back of the board, Feeder Cattle futures closed an average of $1.60 lower ($1.22 to $2.00 lower).
Choice boxed beef cutout value was 72¢ lower Monday afternoon at $224.87/cwt. Select was 43¢ higher at $217.29.
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Major U.S. financial indices plunged sharply lower on Monday, driven by losses at Facebook and the weekend revelation that a political data firm accessed and stored a vast collection of Facebook user data without users’ knowledge. Uncertainty surrounding political rhetoric from the White House continues to add pressure, too.
The Dow Jones Industrial Average closed 335 points lower. The S&P 500 closed 39 points lower. The NASDAQ closed 137 points lower.
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Continued growth in beef production in Mexico may ultimately lead to fewer live cattle exports from the country, says Derrell Peel, Extension livestock marketing Specialist at Oklahoma State University, in his weekly market comments.
“Mexico has exported about 1.1 million head of feeder cattle annually to the U.S. for the past 30 years. In 2017, total U.S. imports of Mexican cattle were 1.2 million, close to the long-term average but up 23.3% percent from 2016,” Peel says. “Current USDA-FAS projections for 2018 include a slight increase in Mexican cattle exports, but preliminary weekly data through early March shows a 13% year-over-year decrease for the year to date. Mexican cattle exports are determined by overall cattle numbers in Mexico, the U.S., and Mexican market conditions and drought conditions.”
Moreover, Peel explains the Mexican cattle and beef industries evolved rapidly over the last decade.
“Growth in Mexican beef exports has been the result of expanded feedlot production, increased federally-inspected slaughter and, most importantly, adoption of boxed beef fabricating technology. Beef carcass weights in Mexico have increased steadily over the past decade,” Peel says. “Mexican beef exports ranked tenth in the world by 2015 although recent growth in Argentinian beef exports in 2018 may push Mexico slightly out of the top-10 list of exporting countries.”