Negotiated cash fed cattle trade in all major cattle feeding regions ranged from a standstill to mostly inactive on very light demand through Tuesday afternoon, according to the Agricultural Marketing Service.
Live prices last week were at $120/cwt. in the Southern Plains, $120-$123 in Colorado, $123 in Nebraska and $123-$125 in the western Corn Belt. Dressed trade was at $195-$196.
Cattle futures closed Lower Tuesday, especially Feeder Cattle, challenged by technical correction and the relentless march higher of corn prices. As well, wholesale beef values stalled the last couple of days.
Live Cattle futures closed an average of 66¢ lower (15¢ to $1.17 lower).
Feeder Cattle futures closed an average $2.09 lower.
Choice boxed beef cutout value was $1.30 lower Tuesday afternoon at $270.11/cwt. Select was 38¢ higher at $266.54.
Corn futures closed 10¢ to 11¢ higher through the front three contracts and then mostly 4¢ to 7¢ higher.
Soybean futures closed 1¢ to 7¢ higher across the front half of the board, and then fractionally lower.
Major U.S. financial indices closed mixed Tuesday. Most pressure focused on stocks benefitting more from further reopening the economy. That was tied to the FDA recommending states pause the use of the Johnson & Johnson COVID-19 vaccine, based on reports of adverse health reactions.
The Dow Jones Industrial Average closed 68 points lower. The S&P 500 closed 13 points lower. The NASDAQ was down 146 points.
Amid elevated wholesale beef values, David Anderson, Extension livestock economist at Texas A&M University says it’s worth remembering beef demand strength, heading into the pandemic.
“A growing economy, falling unemployment, and consumer preferences trending towards higher USDA quality grade beef were building demand,” Anderson says, in the latest issue of In the Cattle Markets. “…The retail all fresh beef demand index scored 119 for 2020, the best in 20 years. That index is calculated using per capita consumption, USDA, BLS retail prices, which only reflect grocery store prices. Regardless, it suggests that we exit the pandemic with a strong base of beef demand.”
Moreover, Anderson says the approaching grilling season, further opening of U.S. businesses and pent-up consumer demand promise to boost prices.
“One macroeconomic statistic that I find interesting is Personal Savings as a Percent of Disposable Personal Income,” Anderson says. “Prior to the pandemic, since 2011, savings averaged about 7%. When widespread shutdowns hit in the second quarter of 2020, GDP fell 9%. With no place to go spend, savings skyrocketed to 26%. While savings declined to 13% since then, that is a lot of money for folks to spend to fund some pent-up demand fun. Economic reopening, combined with people spending and tighter beef supplies later in the year, should suggest some optimism.”