Only four lots (373 head) were offered in the weekly Fed Cattle Exchange auction. One lot of steers and one lot of heifers (156 head total)—both from Kansas—sold for a weighted average price of $117/cwt., for delivery at 1-9 days. That ended up mostly mirroring country trade.
Live trade was $2-$3 lower in the Southern Plains through Wednesday afternoon at $117-$118/cwt. In Nebraska live prices were at mostly $114, which was $3.50 to $8.00 less than last week. Dressed prices in Nebraska and the western Corn Belt were generally $2-$6 lower at $184-$188.
Cattle futures closed sharply higher on Wednesday, perhaps with traders believing that lengthy long liquidation has established a near-term bottom. That came after Cattle futures trending strongly lower for much of the session, reacting in part, to China’s proposed tariffs on a long list of goods that included U.S. beef (see below).
Live Cattle futures closed an average of $1.99 higher through the front five contracts and then 62¢ to $1.50 higher.
Feeder Cattle futures closed an average of $3.00 higher ($2.22 to $4.15 higher).
Choice boxed beef cutout value was $1.51 lower Wednesday afternoon at $218.17/cwt. Select was $3.15 lower at $206.18.
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It was a wild rollercoaster on Wall Street Wednesday as major U.S. financial indices started out sharply lower, in response to China’s proposed tariffs on U.S. goods. Markets roared back, though, presumably on chatter from the White House that eased investor worries.
The Dow Jones Industrial Average closed 230 points higher. The S&P 500 closed 30 points higher. The NASDAQ closed 100 points higher.
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China fired another retaliatory round in the brewing trade war with the U.S., issuing proposed tariffs on 25% of the agricultural and food products it imports from the United States, including U.S. beef. That came after the Trump Administration took another step toward imposing tariffs on $50 billion worth of Chinese exports to the U.S., as a penalty for China’s ongoing violation of intellectual property rights.
“China is a promising market for U.S. beef, and, since the June 2017 reopening, the U.S. industry has made an exceptional effort to provide customers with high-quality beef at an affordable price. This is not an easy task, due to our 13-year absence from the market and China’s beef import requirements,” says Dan Halstrom, president and CEO of the U.S. Meat Export Federation (USMEF).
In the second half of last year, after China reopened the doors, U.S. beef exports to China totaled 3,020 metric tons valued at $31 million, according to USMEF. In January 2018, exports reached the highest monthly volume to date at 819 metric tons, valued at $7.5 million.
In a special edition of Beltway Beef, Kent Bacus points out the tariff on U.S. beef is contingent on the proposed U.S. tariffs going into effect on the imports from China. He reckons there are 6-8 weeks before that happens, if it does, based on ultimate findings by the U.S. Trade Representative. Bacus is director of international trade and market access for the National Cattlemen’s Beef Association.
“Over the past nine months, interest in U.S. beef has steadily gained momentum in China and our customer base has grown. But if an additional import tariff is imposed on U.S. beef, these constructive business relationships, and opportunities for further growth, will be put at risk,” Halstrom says.