Cattle futures weakened on Thursday as traders eyed softer wholesale beef values, volatile outside markets and waited for the weeks cash fed cattle price direction.
Toward the close, Live Cattle futures were an average of 85¢ lower, except for 30¢ higher in spot Oct.
Feeder Cattle futures were an average of $2.40 lower, except for 30¢ higher in spot Oct.
Negotiated cash fed cattle trade was limited on light demand in the western Corn Belt through Thursday afternoon, according to the Agricultural Marketing Service. Although too few transactions to trend, there were some early FOB live sales there at $218/cwt.
Trade was in active on light demand in Nebraska.
Last week, FOB live prices were $220-$222/cwt. in Nebraska and mostly $219-220 in the western Corn Belt. Dressed delivered prices were mostly $345 in Nebraska and $345-$350 in the western Corn Belt. The Texas Cattle Feeders Association reported its members trading fed cattle at $226.
Choice boxed beef cutout value was 77¢ lower Thursday afternoon at $374.85/cwt. Select was $2.48 lower at $351.73.
Grain and Soybean futures were lower Thursday with harvest pressure and positioning ahead of Friday’s monthly World Agricultural Supply and Demand Estimates.
Through late afternoon, and through the front four contracts, Soybean futures were 11¢ lower. Kansas City HRW Wheat futures were 2¢ to 3¢ lower. Corn futures were 2¢ lower.
******************************
Major U.S. financial indices closed mixed Thursday with much of the pressure stemming from AI stocks, as well as higher oil prices.
The Dow Jones Industrial Average closed 51 points higher. The S&P 500 closed 36 points lower. The NASDAQ was down 345 points.
Through mid-afternoon, West Texas Intermediate crude oil futures (CME) were $2.05 to $2.54 higher through the front six contracts.
******************************
President Trump’s Sept. 1 proclamation to waive out-of-quota tariffs for up to 90 days on up to 300,000 tons of imported lean beef trimmings has yet to deliver its aim of lowering ground beef prices for domestic consumers, according to analysis by Bernt Nelson, economist with the American Farm Bureau Federation.
“Across our sample, the average price of ground beef barely moved, going from $7.29 a pound on Sept. 2 to $7.16 a pound on Oct. 5 – a reduction of 13¢ or 1.8%,” Nelson says in the Oct. 5 issue of In the Cattle Marketsfrom the Livestock Marketing Information Center (LMIC). He explains the sample represents prices of 80% lean ground beef tracked daily at 41 grocery stores in 22 states starting Sept. 2, the day after the proclamation went into effect.
The proclamation encourages grocery stores to sell the beef at a 25% discount, without any retailer commitments or enforcement mechanism.
“Imported beef moves through a lengthy supply chain that includes foreign processing and booking, transportation to the U.S., customs clearance, USDA inspections, and distribution to processors for blending,” Nelson explains. “In addition, grocery stores and restaurants typically lock in pricing and promotions months before the product physically arrives. There is no mechanism enforcing who receives the tariff savings from this imported product. This means there is no guarantee the savings will be passed on to the consumer.”
At the same time, Nelson points to the estimated impact on cattle prices projected by Andrew Anderson, Extension livestock economist at Utah State University, in the Sept. 1 issue of In the Cattle Markets. Those projections suggested a decline in fed cattle prices of 1.5-3% and a decline in cull cow prices of 5-10%.
Considering prices from June before the proclamation through September after the proclamation notes prices for feeder cattle weighing 300-900 lbs. declined an average of 15%, while the five-area direct weight average price for fed steers and heifers declined about 14.5%.
“The data suggests that increased beef imports have not delivered meaningful savings to consumers,” Nelson says. “While cattle producers experienced significant price declines, retail ground beef prices remained largely unchanged, highlighting that lower import costs do not necessarily translate into lower prices at the grocery store.”