Daily Market Highlights

Cattle futures closed narrowly mixed on Tuesday, amid lackluster trade and little direction.

Other than 2¢ higher in spot Feb, Live Cattle futures close an average of 9¢ lower.

Feeder Cattle futures closed narrowly mixed, from an average of 26¢ lower across the front half of the board to an average of 20¢ higher across the back half.  

Wholesale beef values were steady on moderate demand and moderate to heavy offerings, according to the Agricultural Marketing Service.

Choice boxed beef cutout value was 13¢ lower Tuesday afternoon at $214.51/cwt. Select was 1¢ lower at $213.47. Other than a single day last February, the Choice-Select spread the past four days ($1.04 to $1.43) is the narrowest since September of 2017.

Corn futures closed 1¢ lower across the front half of the board and then fractionally lower.

Soybean futures closed 10¢ to 13¢ lower through Sep ’20 and then mostly 6¢ to 7¢ lower.

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Major U.S. financial indices closed lower Tuesday, with some of the pressure reportedly stemming from confirmation of coronavirus in a Chinese traveler in Seattle and the potential impact on international travel and tourism.

The Dow Jones Industrial Average closed 152 points lower. The S&P 500 closed 8 points lower. The NASDAQ was down 18 points.

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USDA adjusted forecast fourth-quarter 2019 beef production 15 million lbs. higher than the previous month to 7.0 billion lbs., based on the increased pace of non-fed cattle slaughter in December, especially beef cow slaughter.

In the latest monthly Livestock, Dairy and Poultry Outlook, analysts with USDA’s Economic Research Service (ERS) say beef cow slaughter is significantly higher since the third quarter last year—13% to 25% more than the same period a year earlier, for the first four weeks of December. That’s based on weekly Actual Slaughter Under Federal Inspection reports.

“Since the week ending Nov. 15, prices for live cutter cows have remained more than 10% above prices for the same period a year ago. This, coupled with tight forage supplies for some producers, has likely encouraged higher culling rates” ERS analysts explain.

As for fed cattle, more feedlot placements than expected last month point toward increased fed cattle marketing and beef production in the second quarter this year than originally anticipated, according to ERS.

“However, because those calves were likely placed in feedlots rather than remaining on winter wheat pastures as expected, the placement forecast for first-half 2020 was reduced,” say ERS analysts. “As a result, fewer fed cattle marketings are anticipated in second-half 2020, contributing to less expected beef production during that time.”

Cattle futures and equity markets were closed Monday, in observance of Martin Luther King, Jr. Day.

Wholesale beef values were firm on moderate demand and light offerings, according to the Agricultural Marketing Service.

Choice boxed beef cutout value was 47¢ higher Monday afternoon at $214.64/cwt. Select was 73¢ higher at $213.48.

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Despite last year’s many weather challenges, Derrell Peel, Extension livestock marketing specialist at Oklahoma State University notes that total Dec. 1 hay stocks were 6.9% more year over year at 84.488 million tons. However, he adds the total is 5.4% less than the average for 2014-18.

“Hay stocks were generally up year over year in the Western, Mountain and Plains states, and the Corn Belt, but down in the Great Lakes, Appalachian and Eastern regions,” Peel explains, in his weekly market comments. “Missouri had the largest hay stocks and showed the most increase year over year with stocks up 64.3%, the highest level for the state since 2009. Among the top 10 states for hay stocks, Kentucky, Nebraska, Oklahoma and Tennessee had year over year declines.

According to recent USDA data, Peel says total production of all hay was 128.864 million tons, which was 4.3% more year over year—consisting of 42.6% alfalfa hay and 57.4% other hay. Total hay production was 2.4% below the 2014-2018 average.

“Total hay supplies appear to be generally adequate, although quality may be an issue in some instances,” Peel says. “However, average hay prices are projected to increase 2-4% over the previous crop year. Regionally, the tightest supplies appear to be in the Southeast, Appalachian and Great Lakes regions. Nebraska stands out as a major hay state with decreased production and stocks but surrounded on all sides by states with increased year over year hay production.”

Negotiated cash fed cattle trade through Friday afternoon was steady on a live basis in the Southern Plains and Nebraska at $124/cwt., but $1 lower in the western Corn Belt at $123-$125. Dressed sales were steady to $2 lower at $198-$200.

Cattle futures closed mixed on Friday, but with a firmer feel in Live Cattle as traders positioned ahead of the three-day weekend.

Other than unchanged and 5¢ lower in the back three contracts, Live Cattle futures close an average of 33¢ higher.

Other than 17¢ and 7¢ higher in two nearby contracts, Feeder Cattle futures closed an average of 43¢ lower amid light trade.

Wholesale beef values were higher on moderate to good demand and moderate offerings, according to the Agricultural Marketing Service.

Choice boxed beef cutout value was $1.27 higher Friday afternoon at $214.17/cwt. Select was $1.28 higher at $212.75.

Corn futures closed 12¢ to 13¢ higher in the front three contracts and then mostly 5¢ to 8¢ higher, basically recovering what was lost in the previous session.

Soybean futures closed 2¢ to 5¢ higher. 

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Major U.S. financial indices closed higher Friday, amid positive quarterly corporate earnings and economic news that included a surge in housing starts.

Privately-owned housing starts in December were at a seasonally adjusted annual rate of 1,608,000, which was 16.9% more than the revised November estimate, according to the U.S. Census Bureau and the U.S. Department of Housing and Urban Development.

The Dow Jones Industrial Average closed 50 points higher. The S&P 500 closed 12 points higher. The NASDAQ was up 31 points.

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“Wholesale beef prices are below year-ago levels, but packers continue to pay slightly higher prices than a year ago to bid cattle out of the feedlots, despite weaker margins,” says analysts with USDA’s Economic Research Service (ERS), in the monthly Livestock, Dairy and Poultry Outlook, describing factors for updated first-quarter price forecasts.

“This strength was carried into first-quarter 2020, and that price forecast was raised by $3 to $125/cwt. (fed steer). However, larger numbers of cattle are expected to be available for marketing during the second quarter, which is expected to moderate prices. The 2020 average price for fed steers is forecast at $117.50.”

ERS also increased expectations for first-quarter feeder steer prices (750-800 lbs., basis Oklahoma City).

“Based on recent price data and fewer expected cattle overwintering on pasture, the price forecast for first-quarter 2020 feeder steers was raised by $4 to $144/cwt. The second-quarter 2020 price forecast was raised $2 to $144.00. The fourth-quarter 2020 price forecast was raised by $1 to $145 on expected feedlot demand. The 2020 annual price forecast for feeder steers was raised by $2 to $145.”

Negotiated cash fed cattle prices began to take shape through Thursday afternoon. Live prices in the Southern Plains were steady at $124/cwt. Although too few to trend, early dressed prices up north were steady to $2 lower at $198-$200, based on USDA reports.

Although backing away from session lows, reduced momentum in the cash market helped push Cattle futures lower, as did likely selling and profit taking by those who provided fuel ahead of the phase-one trade agreement between the U.S. and China. That and Senate ratification of the U.S.-Mexico-Canada Agreement (USMCA), which replaces the North American Free Trade Agreement (see below) hold plenty of promise, but plenty of questions remain.

Live Cattle futures close an average of 51¢ lower.

Feeder Cattle futures closed unchanged to an average of 27¢ lower through the front five contracts and then an average of 6¢ higher.

Wholesale beef values were firm to higher on moderate to fairly good demand and moderate offerings, according to the Agricultural Marketing Service.

Choice boxed beef cutout value was 37¢ higher Thursday afternoon at $212.90/cwt. Select was $1.80 higher at $211.47.

Corn futures closed 11¢ to 12¢ lower in the front three contracts and then mostly 5¢ to 7¢ lower.

Soybean futures closed 1¢ to 4¢ lower through Sep ’21 and then mostly 1¢ higher.

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Major U.S. financial indices closed strongly higher Thursday, buoyed by positive economic news and quarterly earnings reports.

The Dow Jones Industrial Average closed 267 points higher. The S&P 500 closed 27 points higher. The NASDAQ was up 98 points.

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The U.S. Senate, on Thursday, approved the U.S.-Mexico-Canada Agreement (USMCA), which replaces the North American Free Trade Agreement (NAFTA).

“We’ve long waited for this day and now USMCA will finally head to the President’s desk,” said U.S. Secretary of Agriculture Sonny Perdue. “The passage of USMCA is great news for America’s farmers and ranchers. With Congressional consideration now complete, our farmers and ranchers are eager to see the President sign this legislation and begin reaping the benefits of this critical agreement.”

Canada and Mexico are the first and second largest export markets for United States food and agricultural products, totaling more than $39.7 billion food and agricultural exports in 2018, according to USDA.

All food and agricultural products that have zero tariffs under the North American Free Trade Agreement (NAFTA) will remain at zero tariffs. Since the original NAFTA did not eliminate all tariffs on agricultural trade between the United States and Canada, the USMCA will create new market access opportunities for United States exports to Canada of dairy, poultry, and eggs. In exchange, the U.S. will provide new access to Canada for some dairy, peanut, and a limited amount of sugar and sugar-containing products.

“This year, we’ve secured new agreements with Japan, China, Canada and Mexico—four of our largest trading partners—which gives producers greater market access for their products and a renewed sense of optimism heading into the 2020 growing season,” explained Iowa Secretary of Agriculture Mike Naig.

According to the U.S. International Trade Commission, Naig explained full implementation of USMCA could increase U.S. agricultural exports by $2.2 billion.

“The U.S. Senate moving quickly to approve USMCA reaffirms the United States’ commitment to two key trading partners, both of which are very important destinations for U.S. pork, beef and lamb,” says Dan Halstrom, president and CEO of the U.S. Meat Export Federation (USMEF).

Mexico and Canada account for about one-third of all U.S. red meat exports, according to USMEF. Shipments to Mexico and Canada in 2019 totaled about 1.25 million metric tons valued at $3.8 billion.

Cash fed cattle trade remained undeveloped through Wednesday afternoon, but early indicators were for at least steady prices.

For instance, Choice steers and heifers sold $2 higher at the fat auction in Tama, IA. Ch 2-4 steers (144 head) weighing an average of 1,416 lbs. sold for an average of $126.26/cwt.

Similarly, slaughter steers and heifers sold $2-$3 higher at Sioux Falls Regional in South Dakota. There were 201 Ch 2-3 steers weighing an average of 1,440 lbs. and bringing an average of $122.41.

Country trade in the western Corn Belt last week was at $124-$126.

There were 734 head offered in Wednesday’s Fed Cattle Exchange auction, with 435 head—two lots of steers in the Southern Plains—selling for a weighted average price of $124.22 for delivery at 1-9 days. The price was a tick higher than last week’s country trade in the region.

Futures market reaction to signing of the phase-one trade deal between the U.S. and China (see below) was largely muted Wednesday, likely a combination of some betting on the come ahead of the deal and the fact that details remain sketchy.

Live Cattle futures close an average of 19¢ lower.

Feeder Cattle futures closed an average of 35¢ lower through the front five contracts and then an average of 44¢ higher.

Wholesale beef values were steady to weak on light to moderate demand and moderate to heavy offerings, according to the Agricultural Marketing Service.

Choice boxed beef cutout value was 23¢ lower Wednesday afternoon at $212.53/cwt. Select was 63¢ lower at $209.67.

Corn futures closed mostly 1¢ lower.

Soybean futures closed 10¢-13¢ lower through Sep ’21 and then 8¢ lower.

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Major U.S. financial indices edged higher Wednesday. While there appeared to be optimism for the signed phase-one trade deal between the U.S. and China, as mentioned earlier, details were scant.

The Dow Jones Industrial Average closed 90 points higher. The S&P 500 closed 6 points higher. The NASDAQ was up 7 points.

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There are plenty of questions to be answered, but Wednesday’s signing of the phase-one trade agreement between the U.S. and China appears to be a massive win for U.S. agriculture, as well as the nation as a whole.

“China will purchase and import on average at least $40 billion of U.S. food, agricultural, and seafood products annually for a total of at least $80 billion over the next two years,” according to a factsheet from the U.S. Trade Representative (USTR). “Products will cover the full range of U.S. food, agricultural, and seafood products.”

In 2017, before the trade war, U.S. agricultural exports to China were $23.8 billion, representing more than 17% of total U.S. agricultural exports, according to the Minnesota Department of Agriculture.

Although there are no details about the specific allocation of China’s agricultural purchases, the agreement paves the way to historic access for U.S. beef, via the removal of non-tariff trade barriers that hamstrung U.S. beef exports for years. Arguably, these were the primary ones:

**China continued to restrict U.S. beef imports from cattle 30 months of age or older. That restriction was imposed when bovine spongiform encephalopathy was discovered in this nation in 2003, but it remained in place, despite the “Negligible” risk status assigned to the U.S. by the World Organization for Animal Health.

**China banned beef from cattle grown with commonly used and safe-proven growth hormones (implants) and beta agonists.

**China demanded a bookend traceability system, knowing where cattle were born and where they were slaughtered.

The new agreement lifts those barriers, according to Kent Bacus, senior director of international trade and market access for the National Cattlemen’s Beef Association (NCBA), in a media call Wednesday afternoon.

“China will expand the scope of beef products allowed to be imported, eliminate age restrictions on cattle slaughtered for export to China, and recognize the U.S. beef and beef products’ traceability system,” according to the USTR factsheet. “China will establish maximum residue levels for three synthetic hormones legally used for decades in the United States, consistent with Codex Alimentarius Commission (Codex) standards and guidelines. Where Codex standards do not exist, China will use MRLs (maximum residue limits) established by other countries that have performed science-based risk assessments.”

Presumably, the latter ultimately could open the door to U.S. beef grown with use of beta agonists.

Further, according to USTR, “The Parties agreed to not implement food safety regulations that are not science-and risk-based and shall only apply such regulations to the extent necessary to protect human life or health…” 

USDA estimates U.S. beef and beef product exports to China could reach $1 billion annually. According to Bacus, U.S. beef exports to China totaled $60 million in 2018 and $70 million through the first 11 months of last year.

NCBA president, Jennifer Houston calls the agreement a game changer for U.S. beef.

“When you’ve got a country (China) with 1.4 billion people, and their middle class is larger than the U.S. population, I’m not sure that there is any other event in the past that has more potential to grow our markets like this does,” Houston explained, during the media call.

Wholesale beef values bounced higher Tuesday on good demand and light to moderate offerings, according to the Agricultural Marketing Service.

Choice boxed beef cutout value was $2.21 higher in the afternoon at $212.76/cwt. Select was $2.07 higher at $210.30.

That and stronger Lean Hog futures helped Live Cattle futures close an average of 22¢ higher.

Other than unchanged and 10¢ higher in the back two contracts, Feeder Cattle futures closed an average of 12¢ lower.

Corn futures closed fractionally lower to 1¢ lower.

Soybean futures closed fractionally lower to 1¢ lower.

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Major U.S. financial indices closed mixed and little changed Tuesday, with better than expected quarterly earnings from the likes of J.P Morgan Chase, but skittishness over Wednesday’s scheduled signing of the phase-one trade deal between the U.S. and China.

The Dow Jones Industrial Average closed 32 points higher. The S&P 500 closed 4 points lower. The NASDAQ was down 22 points.

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“Beef exports are generally expected to be strong in 2020,” says Josh Maples, Extension livestock economist at Mississippi State University. “The latest World Agricultural Supply and Demand Estimates (WASDE) projection for 2020 beef exports is 3.3 billion lbs., which would be a new record and about 9% above 2019 levels.”

Although U.S. beef exports in 2019 look to be less year over year—4.6% less for January through November—in the latest issue of In the Cattle Markets, Maples emphasizes it was not a weak year.

“The 3.02 billion lbs. of 2019 beef exports projected by WASDE would trail only the 3.16 billion lbs. exported in 2018,” Maples says.

Heading into 2020, Maples notes the bevy of trade deals, either recently signed or in progress and ultimately signed, will add support.

As well, both African Swine Fever and the horrendous fires in Australia promise to impact the global flow of animal proteins. 

With respect to the latter, in his weekly market comments, Derrell Peel, Extension livestock marketing specialist at Oklahoma State University says, “Wildfires (in Australia) have burned over 15 million acres, an area the size of West Virginia, and are not yet under control as of Jan. 10. Roughly 9% of the Australian cattle herd is in areas significantly impacted by the fires; another 11% are in regions partially impacted by the fires.”

Drought-forced herd liquidation pushed last year’s Australian beef production and exports higher than previously projected, with female slaughter reaching record proportions of total cattle slaughter, according to Peel. This year, he says Australian beef production is forecast to decrease nearly 15% year over year to the lowest level since 2010. Australian exports are projected to decline by more than 19%, compared to 2019.

“It is mid-summer in Australia and the drought continues unabated with severe rainfall deficits and above average temperatures,” Peel explains. “Additional herd liquidation is likely if conditions do not improve. In any event, Australian cattle and beef production will be reduced for the foreseeable future and rebuilding, whenever it can begin, will take several years.”

Negotiated cash fed cattle prices ended last week mainly steady on a live basis at mostly $124/cwt. and mostly $1-$2 higher in the beef at mainly $200.

Cattle futures basically gave back gains from the previous session on Monday, likely pressured by nearby Lean Hogs, as well as the mostly steady, rather than higher cash fed cattle prices.

Live Cattle futures closed an average of 30¢ lower (2¢ lower to 87¢ lower in spot Feb).

Feeder Cattle futures closed an average of 99¢ lower (45¢ lower at the back to $1.60 lower toward the front).

Wholesale beef values were firm to higher on moderate to good demand and moderate offerings, according to the Agricultural Marketing Service.

Choice boxed beef cutout value was 51¢ higher Monday afternoon at $210.55/cwt. Select was $1.68 higher at $208.23.

Corn futures closed 2¢ to 3¢ higher through Mar ’21 and then mostly 1¢ higher.

Soybean futures closed mostly 3¢ to 6¢ lower

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Major U.S. financial indices closed higher Monday, helped along by news that the U.S. will remove China from its list of currency-manipulating countries, buoying optimism for the phase-one trade deal between the two nations, which is scheduled to be signed Wednesday.

The Dow Jones Industrial Average closed 83 points higher. The S&P 500 closed 22 points higher. The NASDAQ was up 95 points.

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More crossbreeding by dairy farms—dairy cows bred to beef bulls—may shift fewer calves going into veal production and more back toward beef, according to the Livestock Marketing Information Center (LMIC).

“So far, the crossbreeding trend has been rather short-term and modest; on an annualized basis removing 35,000 to 40,000 head from calf slaughter and adding those animals to feedlots,” say LMIC analysts, in the latest Livestock Monitor. “But it may gain momentum. Currently, the LMIC forecasts record small annual calf slaughter levels by 2022.”

LMIC points to the number of calves being harvested for veal production, compared to that in prior years, given that virtually all veal in the U.S. comes from dairy calves.

For the first 14 weeks of 2019, LMIC analysts explain Federally Inspected (FI) calf slaughter was above the same weeks a year earlier. Year-over-year calf slaughter levels fluctuated over the next 28-weeks and then declined the last 10 weeks.

“Some of that 10-week period of declines was due to fewer dairy cows in the U.S….it would represent only a 2,000 to 3,000 head drop in calf slaughter,” LMIC analysts say.

Although it’s unlikely there will be a wholesale shift by dairy producers to churn out Beef X Dairy crossbred steers, LMIC analysts say, “Some regions of the U.S. could see stronger preferences for this strategy than others. Overall, the amount of interest by dairy producers is mounting, because it pencils out nicely for those with the reproductive management skills to capitalize on higher crossbred calf prices.”

Negotiated cash fed cattle trade was light to moderate on moderate demand in Nebraska and the western Corn Belt through Friday afternoon, but there were too few transactions to trend. Early dressed sales in both regions were at $200/cwt. Early live sales in the western Corn Belt were at $124-$126.

Hints of steady to higher cash pries and strong fundamentals helped lift Cattle futures Friday.

Live Cattle futures closed an average of 32¢ higher.

Feeder Cattle futures closed an average of 96¢ higher.

Wholesale beef values were steady on moderate demand and heavy offerings, according to the Agricultural Marketing Service.

Choice boxed beef cutout value was 8¢ higher Friday afternoon at $210.04/cwt. Select was 13¢ lower at $206.55.

Corn futures closed mostly 2¢ higher.

Soybean futures closed 1¢ to 3¢ higher through Jul ’21 and then fractionally higher.

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Major U.S. financial indices closed lower Friday, amid less robust job and wage growth than the trade expected.

Total nonfarm payroll employment rose by 145,000 in December, according to the U.S. Bureau of Labor Statistics. That left the unemployment rate unchanged at 3.5%.

Average hourly earnings for all employees on private nonfarm payrolls in December rose by 3¢ to $28.32. Over the last 12 months, average hourly earnings increased by 2.9%.

The Dow Jones Industrial Average closed 133 points lower. The S&P 500 closed 9 points lower. The NASDAQ was down 24 points.

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The latest World Agricultural Supply and Demand Estimates (WASDE) reduced forecast 2020 beef production on lighter expected carcass weights. However, quarterly beef production was increased in the first half of the year and reduced in the second half of the year due to higher-than-expected cattle placements in late 2019 and a reduced placement forecast for early 2020.

WASDE estimates 2020 beef production at 27.44 billion lbs., which is 75 million lbs. less (-0.27%) than the December forecast. That would be 289 million lbs. more (+1.06%) than in 2019.

Anticipated first-quarter cattle prices were raised, reflecting current early-year price strength. Anticipated average cash fed steer prices (five-area direct) for 2020 are forecast at $125/cwt. in the first quarter, $118 in the second, $112 in the third and $114 in the fourth. The annual average price for 2020 is projected at $117.50, which is 50¢ more than the previous month’s estimate and 72¢ more than the estimated average in 2019.

Total red meat and poultry production for 2020 was estimated at 108.15 billion lbs., which would be 2.94 billion lbs. more (+2.79%) than in 2019.

Cattle futures closed narrowly mixed on Thursday, capped by pressure from Lean Hogs and the lack of cash direction. Perhaps there was also some hesitation over what Friday’s monthly World Agricultural Supply and Demand Estimates could say about feed prices.

Live Cattle futures closed an average of 26¢ higher.

Feeder Cattle futures closed narrowly mixed, from an average of 9¢ higher across the front half of the board to an average of 19¢ lower.

Wholesale beef values were steady to firm on moderate to fairly good demand and heavy offerings, according to the Agricultural Marketing Service.

Choice boxed beef cutout value was 46¢ higher Thursday afternoon at $209.96/cwt. Select was 15¢ higher at $206.68.

Corn futures closed mostly fractionally mixed to 1¢ lower.

Soybean futures closed mostly 4¢ lower.

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Major U.S. financial indices posted another day of strong gains Thursday, led by tech stocks.

The Dow Jones Industrial Average closed 211 points higher. The S&P 500 closed 21 points higher. The NASDAQ was up 74 points.

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Agricultural producer sentiment declined in December, driven by the outlook for current economic conditions, according to the Purdue University/CME Group Ag Economy Barometer.

Specifically, the overall index declined 3 points from November to a reading of 150, while the Index of Current Conditions—one of the sub-indexes—declined 12 points to a reading of 141. Conversely, the index of Future Expectations increased 2 points to a reading of 155.

“These results are indicative of the variability in economic conditions on U.S. farm operations, with some farms performing better than expected and others worse than expected,” says James Mintert, the barometer’s principal investigator and director of Purdue University’s Center for Commercial Agriculture.

The Ag Economy Barometer is based on a mid-month survey of 400 U.S. crop and livestock producers.

Producers were asked whether their farm’s 2019 financial performance was better than expected, as expected, or worse than their initial budget projections. Just over half (52% percent) said their initial projections matched their farm’s financial performance; 30% said it was worse; and 19% said it was better than expected.

To better assess the level of financial stress among U.S. farms, November and December surveys asked producers whether they expected their farm’s 2020 operating loan to be larger, about the same, or smaller than in 2019.

Approximately one out of five respondents in the two surveys expected to have a larger operating loan in 2020 compared to 2019. Of those, three out of 10 indicated the reason was unpaid operating debt from 2019. Carrying over unpaid operating debt from year to year is an indicator of financial stress, and these results suggest that about 6% of farms surveyed for the Ag Barometer in late 2019 were experiencing financial stress.

Producers remained relatively optimistic about the ongoing trade dispute between the U.S. and China being resolved soon and to the benefit of U.S. agriculture.

In December, 54% of respondents stated they expect a resolution soon, which was 3% less than the previous month, but the second most positive response since last March.

The percentage of producers who expect a favorable outcome to U.S. agriculture declined 8 points to 72%. Since the question was first posed in March 2019, more than 70% of respondents have, on average, indicated they expect a favorable outcome to the trade dispute for U.S. agriculture.

Negotiated cash fed cattle trade remained undeveloped through Wednesday afternoon, based on USDA reports. Early indications are for steady to higher prices again this week, with the expectation of a bit snugger harvest-ready supplies.

There were 525 head offered in the year’s first weekly Fed Cattle Exchange auction, and no takers. Two lots of steers from Texas and Kansas were passed on at $123.00/cwt. and $124.25, respectively.

Cattle futures mostly rebounded from the previous session’s softer tones, led by Feeder Cattle.

Except for 17¢ and 32¢ lower in the front two contracts, Live Cattle futures closed an average of 32¢ higher.

Feeder Cattle futures closed an average of 91¢ higher (40¢ to $1.40 higher).

Wholesale beef values were steady to weak on light to moderate demand and moderate to heavy offerings, according to the Agricultural Marketing Service.

Choice boxed beef cutout value was 6¢ lower Wednesday afternoon at $209.50/cwt. Select was 29¢ lower at $206.53.

Corn futures closed mostly unchanged to fractionally higher.

Soybean futures closed 1¢ to 3¢ higher through Mar ’21 and then mostly fractionally higher.

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Major U.S. financial indices closed higher Wednesday, amid increasing confidence that the tensions between the U.S. and Iran are easing. For instance, West Texas Intermediate crude oil futures (CME) closed $2.71 to $3.09 lower through the front six contracts.

The Dow Jones Industrial Average closed 161 points higher. The S&P 500 closed 15 points higher. The NASDAQ was up 60 points.

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Although trailing the previous year’s record pace, U.S. beef export value through November was the second highest on record, according to data released by USDA and compiled by the U.S. Meat Export Federation (USMEF).

For January through November, beef exports were 3% less in both volume of 1.21 million metric tons (mt) and value of $7.4 billion. Year over year, November beef exports were 4% less in volume (108,662 mt) and 7% less in value ($658.1 million).

Among highlights, U.S. beef exports to Korea were on a record pace, up 6% in volume through November and up 6% in value at $1.69 billion. U.S. share of Korea’s chilled beef imports reached 62%, up from 58% in 2018. U.S. beef accounted for 51% of Korea’s total beef and beef variety meat imports and more than one-third of Korea’s total beef consumption.

Beef exports to Taiwan were also on a record pace, for the fourth consecutive year. Through November, U.S. exports to that nation were 8% more than the previous year for volume and value was 4% higher at $513.3 million.

However, reduced exports to Japan—the largest destination for U.S. beef exports—offset gains made in Korea and Taiwan.

Through November, exports to Japan were 6% less year over year in volume and 7% less in value at $1.8 billion. Tariff relief, beginning Jan. 1 provides more optimism for 2020.

“The Japanese market performed extremely well for U.S. beef in 2018, even though we were already facing a tariff rate disadvantage versus Australia,” says Dan Halstrom, USMEF president and CEO. “More competitors saw tariff rate cuts in 2019 under the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP), which further tilted the playing field against U.S. beef. For example, Canada’s beef exports to Japan increased 57% last year. So the rate cuts Japan recently implemented for U.S. beef are long overdue, and USMEF is working aggressively with U.S. exporters and the Japanese trade to capitalize.”

Beef export value per head of fed slaughter was $307.55 in November, down 15% from a year earlier. Through November, per-head U.S. export value averaged $308.74, down 4%.