WLI

Negotiated cash fed cattle trade opened on Tuesday with moderate demand and light to moderate trade in the Southern Plains and the Northern Plains. Live prices were at $126/cwt. which was $1 lower in the Southern Plains and $2-$3 lower in Nebraska.

Cattle futures traded on either side of steady early in Tuesday’s session and then gave way to continued pressure stemming from light volume, technical selling and overall bearishness.

Live Cattle futures closed an average of 76¢ lower (57¢ to $1.15 lower).

Feeder Cattle futures closed an average of 78¢ lower (67¢ to 92¢ lower).

Choice boxed beef cutout value was $1.52 lower Tuesday afternoon at $223.35/cwt. Select was 55¢ lower at $216.74.

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Major U.S. financial indices regained some of the previous days steep losses on Tuesday. Support included some recovery in tech stocks.

The Dow Jones Industrial Average closed 116 points higher. The S&P 500 closed 4 points higher. The NASDAQ closed 20 points higher.

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Although same-store restaurant sales and traffic declined in January, restaurant operators remained mostly optimistic about current business conditions, according to the latest Restaurant Performance Index (RPI) from the National Restaurant Association (NRA).

The RPI was 100.9 in January, which was down 2 points from the previous month and consistent with last year’s average level. Both of the sub-indexes that comprise the RPI were lower in January, too. The Current Situation Index in January was down 3.5% from the previous month to 99.4. The Expectations Index was 0.5% lower at 102.

Although same-store sales softened in January month-to-month, according to NRA, restaurant operators reported a net increase in same-store sales for the third consecutive month.

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.”

Technical selling helped pressure Cattle futures again on Friday, despite the higher cash trade and strong wholesale beef values. More supply is coming, but current pressure seems overdone.

Live Cattle futures closed an average of 42¢ lower (15¢ to 70¢ lower).

Feeder Cattle futures closed an average of 37¢ lower (10¢ to 65¢ lower).

Choice boxed beef cutout value was 60¢ higher Friday afternoon at $225.59/cwt. Select was 55¢ higher at $216.86.

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Major U.S. financial indices edged to a mixed close on Friday. Support included the latest Surveys of Consumers from the University of Michigan, indicating that consumer sentiment rose in early March to the highest level since 2004.

The Dow Jones Industrial Average closed 72 points higher. The S&P 500 closed 4 points lower. The NASDAQ closed fractionally higher.

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Grocery store sales growth in January was up 4.5% from 12 months earlier, the stoutest monthly year-over-year gain since January of 2015, according to the Livestock Marketing Information Center (LMIC), in the latest Livestock Monitor. Likewise, analysts there say food sector sales growth (grocery store plus food service and drinking places) during January was up 3.1% from a year ago.

“Wholesale demand for the three leading meat commodities (beef, pork and chicken) trends are generally consistent with the consumer spending situation,” LMIC analysts explain. “The Choice beef cutout will be up this quarter from the last quarter of 2017, which is a little better than estimates indicated at the end of last year that were driven by an outlook for larger beef production. Similarly, the pork cutout has also gained value this quarter from late 2017, even with larger pork production. Chicken breast meat prices at the wholesale level have held steady in January and February, in line with expectations at the start of the year. Chicken wing prices in wholesale trade have been surprisingly weak so far this year, which may be a consequence of modest sales growth in the food service and drinking place sector so far this year.”

Negotiated cash fed cattle trade on Thursday in Nebraska and the western Corn Belt continued mostly steady with prices established earlier in the week: $128.00-$128.50 and $128-$131, respectively on a live basis. In the beef, prices were $205 in Nebraska and $205-$207 in the western Corn Belt.

Despite steady to higher cash fed cattle trade and strong wholesale beef values, Cattle futures closed solidly lower on Thursday, amid apparent technical selling and continued concern about growing supplies relative to demand.

Live Cattle futures closed an average of $1.09 lower (95¢ to $1.22 lower).

Feeder Cattle futures closed an average of $1.97 lower ($1.42 to $2.17 lower).

Choice boxed beef cutout value was 88¢ higher Thursday afternoon at $224.99/cwt. Select was 70¢ lower at $216.31.

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Major U.S. financial indices closed mixed on Thursday, with worries about a potential trade war with China continuing to cast a pall.

The Dow Jones Industrial Average closed 115 points higher. The S&P 500 closed 2 points lower. The NASDAQ closed 15 points lower.

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Canadian cattle inventories grew last year, according to data recently released by Statistics Canada, but just a little.

There were 37.10 million beef cows in Canada Jan. 1, which was 0.80% more than the previous year, or 29,500 head more. Total cattle and calves in Canada of 11.62 million head were 0.91% (+105,000 head) more than the previous year.

By way of review, beef cows in the U.S. were 1.63% more (+509,800 head) more year over year at 3.71 million head. Total cattle and calves in the U.S. Jan. 1 of 94.40 million head (+694,400 head) were 0.74% more than the previous year.

Combined, the total number of beef cows in the U.S. and Canada Jan. 1 of 35.43 million head was 1.54% (+539,300 head) more than the previous year. The total inventory of cattle and calves for the two countries was 0.76% more (+799,400 head) at 106.02 million head.