Cattle futures bounced back on Monday as traders retrenched for the new quarter. There was chatter that optimism about spring consumer beef demand provided the lift. Could be, but nothing changed on that fundamental front since Friday. For Feeder Cattle, the bearish crops reports on Friday likely provided some support.
Live Cattle futures closed an average of 46¢ higher. Since setting a new record Mar. 22, open interest declined 15,515 contracts to 439,234 on Friday.
Feeder Cattle futures closed an average of $1.27 higher across the back half of the board; an average of 33¢ higher through the front.
Corn futures closed 4¢ to 5¢ higher through Sep ’20, and then mostly 1¢ to 2¢ higher, rebounding from the hard dive Friday.
Soybean futures closed 8¢ to 11¢ higher, helped by late-week reports of a buy from China
Wholesale beef values were firm to higher on light to moderate demand and offerings, according to the Agricultural Marketing Service.
Choice boxed beef cutout value was 80¢ higher Monday afternoon at $226.84/cwt. Select was 44¢ higher at $219.33.
Major U.S. financial indices closed sharply higher Monday, with popular analysis attributing the gains to positive manufacturing data from both the U.S. and China, damping concerns about economic growth in those countries, at least for the day.
The closely watched Institute for Supply Management® (ISM) Purchasing Managers Index (PMI®) was 55.3% for March, increasing 1.1% month to month.
“Comments from the panel reflect continued expanding business strength, supported by gains in new orders and employment,” says Timothy R. Fiore, CPSM, C.P.M., Chair of the ISM Manufacturing Business Survey Committee.
The Dow Jones Industrial Average closed 329 points higher. The S&P 500 closed 32 points higher. The NASDAQ was up 99 points.
“Total 2019 meat production in the U.S. is currently projected to reach another record level of 103.3 billion lbs., up 1.3% year over year. However, per capita meat consumption may decrease slightly to 217.3 lbs. from the 2018 level of 218.6 lbs.,” says Derrell Peel, Extension livestock marketing specialist at Oklahoma State University, in his weekly market comments. “The decrease in per capita meat consumption reflects improved meat trade, with projected decreases in meat imports and increased meat exports, along with normal population growth.”
Peel points out 2004 was the record year for per capita meat consumption at 221.9 lbs. He explains lower population, higher meat imports, and meat exports that were less than half of current levels increased per capita consumption, despite lower total meat production of 85.1 billion lbs., which was 17.6% less than today.
Beef production this year is projected at 27.2 billion lbs., about 1.1% more than last year.
“Weather impacts are holding carcass weights well below year-ago levels so far this year and annual average carcass weights are projected to only increase slightly year over year,” Peel says. “Cattle slaughter is projected to increase about 1% year over year. With beef imports projected to decrease and beef exports expected to increase again in 2019, per capita beef consumption is expected to decrease to 56.8 lbs. (retail basis), down from 57.1 lbs. one year ago.”
These projections reflect estimates and analysis by Peel and the Livestock Marketing Information Center.