Negotiated cash fed cattle trade ended up sharply higher last week: $5 higher on a live basis in the Southern Plains at $115/cwt., $3-$5 higher in the western Corn Belt at $115 and $3-$4 higher in Nebraska at $114-$115. Dressed trade was $5-$7 higher at $182-$184.
Cattle futures moved higher through much of the session Monday, buoyed by follow-through support from last week’s higher cash fed cattle trade. By the end of the day, though, futures closed solidly lower, most likely on profit taking.
Except for 12¢ higher in the back contract, Live Cattle futures closed an average of $1.12 lower (75¢ to $1.25 lower).
Except for an average of $1.25 lower in the front two contracts, Feeder Cattle futures closed an average of 50¢ lower.
Boxed beef cutout values were weak to lower on moderate demand and offerings, according to the Agricultural Marketing Service.
Choice boxed beef cutout value was $1.08 lower in the afternoon at $225.13/cwt. Select was 38¢ lower at $202.80.
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Major U.S. financial indices closed little changed Monday.
The Dow Jones Industrial Average closed 5 points higher. The S&P 500 closed 2 points higher. The NASDAQ was up 14 points.
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“In the U.S. wholesale meat marketplace, robust exports have been a factor cushioning beef prices against large supplies,” notes Jim Robb, director of the Livestock Marketing Information Center (LMIC), in this week’s Cow-Calf Corner. “In the World Agricultural Supply and Demand Estimates (WASDE) issued last month by USDA, their forecast was for U.S. beef exports in 2018 to be 3.03 billion lbs., 6% above 2017’s. That would be the first time for foreign sales to exceed 3 billion pounds. Year-to-date trends are on the path to reach that level.”
Of course, assorted trade issues percolating currently will have plenty to say about ultimate export reality.
“More than just insights into actual policy changes and tariff rates are required to forecast exports,” Robb explains. “For example, in the current world economic environment, exchange rates adjustments can have a significant impact on the price paid by a foreign buyer for U.S. agricultural products. Exchange rates are determined by macroeconomic forces and by sectors much bigger than the agriculture and food trade sphere. That is, exchange rates are realistically exogenous, using an economics term, to the trade of agricultural and food products. The value of the Mexican peso could drop versus the U.S. dollar, mitigating, at least partially, the short-term impacts of any new tariffs on U.S. exports to that country.”