Negotiated cash fed cattle trade was slow on moderate demand in Nebraska and the western Corn Belt through Thursday afternoon, according to the Agricultural Marketing Service.
Live trade continued at $120/cwt. in Nebraska, which is steady with the previous week. Dressed trade earlier in the week was at $190-$191, which was steady to $1 lower.
Although too few to trend, there were some live trades in the western Corn Belt at $120 and some in the beef at $191. Prices last week were at mostly $120 and $188-$191, respectively.
Trade was limited on light demand in Kansas with a few live trades at $119, steady with earlier in the week but steady to $1 lower than last week.
Elsewhere, trade was mostly inactive on very light demand. Earlier in the week live trades were at $119-$120 in the Texas Panhandle, which was steady to 50¢ higher than last week.
Feeder Cattle futures closed and average of $1.54 lower Thursday, pressured by the bounce higher in Corn futures and the dour fed cattle market.
Live Cattle futures closed mixed (average of 22¢ lower to average of 43¢ higher), helped along by stellar wholesale beef prices.
Choice boxed beef cutout value was 80¢ higher Thursday afternoon at $324.18/cwt. Select was $1.92 higher at $301.61.
Net U.S. beef export sales added optimism. For the week ending May 13, they were 56,900 metric tons (mt), according to the U.S. Export Sales report from USDA. That’s a market-year high, up noticeably from the prior week and from the previous four-week average. Increases were primarily for the Netherlands, China, Japan, South Korea and Taiwan.
The average dressed steer weight the week ending May 8 was 896 lbs., which was 5 lbs. heavier than the previous week and even with the same week last year, according to USDA’s Actual Slaughter Under Federal Inspection report. The average dressed heifer weight was 826 lbs., which was 2 lbs. heavier than the prior week but 3 lbs. lighter than the previous year.
Corn futures closed mostly 12¢ to 13¢ higher through Jly ‘22 and then mostly 3¢ to 4¢ higher.
Soybean futures closed mostly fractionally lower to 3¢ lower.
Major U.S. financial indices closed higher Thursday, lifted by a rebound from the previous session’s sharp decline in digital Bitcoin currency, as well as positive employment news. Weekly initial unemployment insurance claims were 444,000, according to the U.S. Department of Labor. That was 34,000 fewer than the previous week and a pandemic-era low.
The Dow Jones Industrial Average was up 188 points. The S&P 500 closed 43 points higher. The NASDAQ was up 236 points.
Beef production next year is projected to be 2% less than this year at 27.3 billion lbs., according to USDA’s Economic Research Service (ERS). If so, that would be the first year-over-year decline of domestic beef production in seven years.
That’s based on expectations drought conditions will accelerate the pace of cattle slaughter in the second-half of this year, likely reducing cattle supplies for next year. “However, carcass weights are expected to increase year over year as non-fed cattle will be a smaller portion of the slaughter mix,” ERS analysts explain.
The same expectations for increased cattle slaughter in the second half of this year led ERS to increase projected 2021 beef production to 27.9 billion lbs., which was 260 million lbs. more than the previous month.
“A greater number of feeder cattle than expected were placed in first-quarter 2021, raising the expected pace of fed cattle marketed for slaughter,” say ERS analysts in the latest Livestock, Dairy and Poultry Outlook. “In second-quarter 2021, poor pasture conditions and higher feed costs will likely favor a faster pace of cattle entering feedlots, supporting higher fed cattle marketings in the second half of 2021. Further, in the face of expected tightening forage supplies, producers will likely increase culling of breeding stock—both cows and bulls—in second-half 2021.”