The five-area direct weighted average steer price last week was $105.06/cwt. on a live basis, which was $3.72 more than the previous week. The average steer price in the beef was $4.84 more week to week at $168.04.
Cattle futures closed lower, following early lift, with higher Corn futures helping pressure Feeder Cattle the most.
Live Cattle futures closed an average of 66¢ lower.
Feeder Cattle futures closed an average of $1.54 lower (30¢ at the back to $2.22 lower).
Choice boxed beef cutout value was $3.02 higher Monday afternoon at $217.26/cwt. Select was $2.65 higher at $201.94.
Corn and soybean futures closed higher Monday with support from the weather outlook and thoughts last week’s derecho will reduce production. Week-to-week condition ratings also declined slightly for both crops.
Corn futures closed 4¢ to 7¢ higher.
Soybean futures closed 11¢ to 17¢ higher through Jan ’22 and then mostly 9¢ higher.
Major U.S. financial indices closed mixed on Monday. Uncertainty about the next round of coronavirus economic aid added pressure. Positive news came from the housing sector.
Builder confidence in the market for newly-built single-family homes increased six points to 78 in August, according to the latest National Home Builders Association (NAHB)/Wells Fargo Housing Market Index (HMI) released Monday. That’s the highest index level in the 35-year history of the series, matching the record set in December 1998.
“Housing has clearly been a bright spot during the pandemic and the sharp rebound in builder confidence over the summer has led NAHB to upgrade its forecast for single-family starts, which are now projected to show only a slight decline for 2020,” says NAHB Chief Economist Robert Dietz. “Single-family construction is benefiting from low interest rates and a noticeable suburban shift in housing demand to suburbs, exurbs and rural markets as renters and buyers seek out more affordable, lower density markets.”
The Dow Jones Industrial Average closed 86 points lower. The S&P 500 closed 9 points higher. The NASDAQ closed 110 points higher.
“With a weaker global economic situation, meat trade forecasts have been revised. Total pork and broiler exports are still projected higher year over year, but beef exports are now projected to be lower year over year,” says Derrell Peel, Extension livestock marketing specialist at Oklahoma State University, in his weekly market comments.
Peel points out that even with pandemic disruptions earlier this year, the U.S. is on track for record production of beef, pork and broilers.
“Before COVID-19, it was recognized that meat trade would be critical for markets in 2020 and that certainly remains true at this point,” Peel says.
According to Peel, year-to-date beef exports for January through June were down 7.6%, following a year-over-year decrease in June of 33.0% and a similar decline in May.
In terms of specific markets, Peel says Japan remains the largest U.S. beef export market, up 5.6% year over year in the first half of 2020. However, U.S. beef exports to that nation were 20.7% less year over year in June and 23.6% less in May.
South Korea is the second largest export market for U.S. beef. Exports to that nation are 7.4% less year over year through June, following double-digit monthly decreases in April, May and June.
Second-quarter beef exports to Mexico, the third largest export market in recent years, were 66.9% less year over year, according to Peel. Year-to-date exports to the nation are 37.7% less than a year earlier.
“Four of the five largest beef exports markets dropped sharply in the second quarter and will be watched closely for recovery in the second half of the year,” Peel says. “China will continue to be a major driver of global protein trade, especially pork. China will remain a minor beef export market in 2020 but is likely to continue growing, barring major geopolitical disruptions. Mexico remains a major concern with dramatic economic weakness expected to continue.”