Cattle futures powered upward Wednesday, helped along by another bounce in wholesale beef values and growing expectations of steady to higher cash fed cattle trade again this week.
Toward the close, Live cattle futures were an average of $2.04 higher. Feeder Cattle futures were an average of $3.91 higher.
Negotiated cash fed cattle trade was mostly inactive on moderate demand in all major cattle feeding regions through Wednesday afternoon, according to the Agricultural Marketing Service.
Last week, FOB live prices were $235/cwt. in the Texas Panhandle, $235-$236 in Kansas, $245-$247 in Nebraska and mostly $245 in the western Corn Belt. Dressed delivered prices were mostly $383.
Choice boxed beef cutout value was $4.92 higher Wednesday afternoon at $374.86. Select was $5.42 higher at $351.36.
Turning toward the gain complex,
Toward the close and through away Jly contracts, Corn futures were another 3¢ to 5¢ lower as traders bet on a behemoth crop. Kansas City Wheat futures were 6¢ to 7¢ higher. Soybean futures were 5¢ to 7¢ lower.
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Major U.S. financial indices closed higher Wednesday led by tech stocks, namely, the boost in Apple based on quarterly earnings.
The Dow Jones Industrial Average closed 81 points higher. The S&P 500 closed 45 points higher. The NASDAQ was up 252 points.
Toward the close, West Texas Intermediate Crude Oil futures (CME) were 80¢ to $1.02 lower through the front six contracts.
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U.S. beef export volume in June was the least in five years, due in part to China’s failure to renew registrations for the vast majority of U.S. plants, according to data released by USDA and compiled by the U.S. Meat Export Federation (USMEF).
Beef exports totaled 93,928 metric tons (mt) in June, down 15% from a year ago and the lowest since June 2020. Export value was $769 million, down 18% and the lowest in 17 months. Shipments to Korea and Mexico were steady with year-ago levels, while exports increased sharply to Central and South America and variety meat demand strengthened in Egypt and in several emerging markets in Africa. But these gains did not fully offset the steep decline in exports to China and lower shipments to Japan.
Lack of access to China not only results directly in lost business and missed opportunities, but the U.S. beef industry is also losing the premiums generated when Chinese buyers compete for cuts that are especially popular throughout Asia, such as short plate, top blade, chuck rolls and short ribs. Without exports to China, USMEF estimates the U.S. beef industry’s lost opportunity at $150 to $165 per head of fed slaughter, or about $4 billion annually.
“The June export results really underscore the urgent need to resolve this impasse with China,” says Dan Halstrom, USMEF president and CEO. “China’s tariff rate on U.S. beef is currently 32% – which is too high, but not insurmountable. The problem is, with only a few plants eligible to ship to China, the tariff rate becomes irrelevant. Consistent and transparent plant approvals, without expiration, were among the most important components of the 2020 Phase One Agreement with China, and it’s time for China to return to those commitments.”
While USMEF remains hopeful that access to China will be restored soon, the current situation highlights the importance of diversification and further development of emerging markets such as Central America and Southeast Asia.
For January through June, beef exports were 6.5% below last year’s pace at 602,221 mt, while value fell 6% to $4.92 billion.
Beef exports equated to $392.72 per head of fed slaughter in June, down 14% from a year ago (again, reflecting the absence of China). The January-June average was $410.00, down 2% from the first half of 2024.