Higher wholesale beef values helped Live Cattle futures firm on Monday.
Live Cattle closed an average of 67¢ higher.
Feeder Cattle futures closed an average of 50¢ lower, except for $1.45 higher in spot Apr.
Negotiated cash fed cattle trade ranged from inactive on very light demand to a standstill through Monday afternoon, according to the Agricultural Marketing Service.
Last week, FOB live prices were $2 lower in the Texas Panhandle at $184/cwt., $1-$2 lower in Kansas at $183-$184, $2-$3 lower in Nebraska at $187 and $1-$3 lower in the western Corn Belt at $187. Dressed delivered prices were $3-$5 lower in Nebraska at $296-$297 and $2-$3 lower in the western Corn Belt at $297.
The weighted average five-area direct FOB live steer price last week was $2.50 lower at $185.73. The weighted average dressed delivered steer price was $2.62 lower at $296.87.
Choice boxed beef cutout value was $4.90 higher Monday afternoon at $302.07/cwt. Select was $5.57 higher at $300.27/cwt.
Turning to row crops, Corn futures closed mostly fractionally higher to 1¢ higher. KC HRW Wheat futures closed mostly 5¢ higher.
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Major U.S. financial indices closed little changed Monday.
The Dow Jones Industrial Average closed 11 points lower. The S&P 500 closed 1 point lower. The NASDAQ was up 5 points.
West Texas Intermediate Crude Oil futures (CME) closed 34¢ to 42¢ lower through the front six contracts.
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As reported in the last issue of Cattle Current, U.S. beef exports continued to firm in February, according to data released by USDA and compiled by the U.S. Meat Export Federation (USMEF). Although volume was down, value for the month was 10% higher at 830.4 million.
Derrell Peel, Extension livestock marketing specialist at Oklahoma State University lent perspective in his weekly market comments Monday. He explained beef exports continue to face headwinds as beef production decreases and beef prices increase in the U.S. market.
“A generally strong U.S. dollar adds additional headwinds, making U.S. beef imports more expensive to international customers,” Peel says. “At the same time, decreasing domestic beef supplies in the U.S., coupled with higher prices, attracts additional beef imports, with the strong dollar adding additional incentive for beef imports.” He explains beef imported to the U.S. typically is lean processing beef to supplement decreasing supplies of non-fed beef in the U.S.
Peel notes decreasing domestic lean beef supplies and strong ground beef prices are pushing both to record price levels.
Moreover, while fed steer and heifer beef production is declining, Peel notes the current large percentage of yield grade 4 and 5 cattle in feedlots means that the supply of fatty (50% lean) trimmings is high relative to lean beef supplies.