Cattle futures closed lower Monday as Corn futures continued to rally 12¢ to 23¢ higher through old-crop and new-crop contracts, perhaps also buoyed by the slow planting pace.
According to the latest USDA Crop progress report, 4% of the corn is in the ground compared to 7% last year and the five-year average of 6%.
Feeder Cattle futures closed an average of $2.36 lower, while Live Cattle futures closed an average of 69¢ lower, except for 2¢ higher in the back contract.
For much of last week, Cattle futures got a boost from stronger negotiated cash fed cattle prices that were $1-$4 higher on a live basis, depending on the region at $139-$143/cwt. Dressed prices were $3-$5 higher at $225-$227.
On Monday, negotiated cash fed cattle trade ranged from inactive on light demand to a standstill, according to the Agricultural Marketing Service.
The five-area direct weighted average steer price last week was $141.02/cwt., which was $2.20 more than the previous week. The average steer price in the beef was $3.46 higher at $225.89.
Choice Boxed beef cutout value was $1.54 lower Monday afternoon at $271.08/cwt. Select was 56¢ higher at $259.46.
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Major U.S. financial indices edged lower in a volatile session Monday, as investors considered inflation, surging commodity markets and quarterly corporate earnings reports due out this week.
The Dow Jones Industrial Average closed 39 points lower, The S&P 500 closed fractionally lower. The NASDAQ was down 18 points.
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Reduced production and high prices will likely mean fewer U.S. beef exports this year, although exports are expected to remain at historically high levels.
Last year, U.S. beef exports comprised 12.3% of domestic production at 3.45 billion lbs. This year, USDA’s Economic Research Service (ERS) projects exports at 3.3 billion lbs., which would be 11.9% of production.
Globally, beef production is expected to grow this year and global beef trade is projected to continue at record levels, according to Derrell Peel, Extension livestock marketing specialist at Oklahoma State University.
Specifically, in his weekly market comments, Peel says beef production this year is expected to grow in Brazil, China, India, Australia and Mexico. Projections anticipate reduced production in the U.S., Canada, the European Union (E.U.) and Argentina.
“Brazil is projected to be the largest beef exporting country again in 2022 with exports forecast to increase 12.1% year over year,” Peel says. “Brazil has been the largest beef exporting country for the last five years consecutively and the largest in 14 of the last 20 years after first becoming the largest exporting country in 2004. Brazil is projected to account for 22% of global beef exports this year.”
By way on contrast, Peel explains the U.S. is expected to be the second-largest global beef exporter this year. India is third largest and Australia will likely rank fourth. These four countries would represent about 60% of global beef exports this year, according to Peel.
On the other side of the scale, Peel says the U.S. is projected to be the second largest beef importer in the world behind China/Hong Kong. Much of the beef imported to the U.S. is lean trim used in ground beef blends.
“Although global beef trade is summarized in terms of total quantities, it is important to recognize that beef consists of many different products and most beef exports and imports are specific products moving between specific destinations for specific uses,” Peel says. “Trade in beef products helps balance both the overall quantity of beef and the preferred mix of beef products in various markets. Beef trade adds value for both exporters and importers and increases the total value of the global beef industry.”