Cattle futures sagged lower Thursday, pressured by softer cash prices. Also, net 2020 beef export sales for the week ending Aug. 20 were 11,800 metric tons, down 40% from the previous week and 36% from the prior four-week average, according to the weekly U.S. Export Sales report from USDA’s Foreign Agricultural Service.
Live Cattle futures closed an average of 54¢ lower, from 10¢ lower in the back contract to $1.17 lower.
Feeder Cattle futures closed an average of 55¢ lower.
Choice boxed beef cutout value was 9¢ higher Thursday afternoon at $231.54/cwt. Select was 15¢ higher at $214.26.
Total cattle slaughter the week ending Aug. 15 was 643,681, according to USDA’s Actual Slaughter Under Federal Inspection report. That was 10,713 head more than the previous week, but 9,601 fewer (-1.47%) than the same week a year earlier.
Fed cattle slaughter for the week of 519,567 head was 7,312 head more than the previous week, and just 1,140 head fewer than the previous year.
The average dressed steer weight was 909 lbs., which was 3 lbs. heavier than the previous week and 28 lbs. heaver than the same week last year. The average dressed heifer weight of 833 lbs. was 1 lb. heavier than the prior week and 24 lbs. heavier than the previous year.
Heavier carcass weights continue to increase year-over-year beef production with less slaughter. Total beef production of 536.7 million lbs. was 10.5 million lbs. more than the previous week and 6.4 million lbs. more than the previous year.
Corn futures closed mostly 1¢ to 3¢ higher.
Soybean futures closed 12¢ to 17¢ higher through Jly ’21 and then mostly 5¢ to 8¢ higher.
Major U.S. financial indices closed mixed on Thursday.
Support included approved updates to the Federal Open Market Committee’s (FOMC) Statement on Longer-Run Goals and Monetary Policy Strategy.
Among other things, according to an FOMC statement, “The FOMC adjusted its strategy for achieving its longer-run inflation goal of 2% by noting that it, ‘seeks to achieve inflation that averages 2% over time.’ To this end, the revised statement states that, ‘following periods when inflation has been running persistently below 2%, appropriate monetary policy will likely aim to achieve inflation moderately above 2% for some time.’”
In other words, it seems the FOMC will be more hesitant about increasing interest rates when inflation accelerates.
“The economy is always evolving, and the FOMC’s strategy for achieving its goals must adapt to meet the new challenges that arise,” says Federal Reserve Chair Jerome H. Powell. “Our revised statement reflects our appreciation for the benefits of a strong labor market, particularly for many in low- and moderate-income communities, and that a robust job market can be sustained without causing an unwelcome increase in inflation.”
The Dow Jones Industrial Average closed 160 points higher. The S&P 500 closed 5 points higher. The NASDAQ closed 39 points lower.
Customer transaction declines at major restaurant chains improved into the single-digits after 21 weeks of double-digit declines, according to The NPD Group (NPD). Customer transactions were 9% less than a year earlier for the week ending Aug. 16. That represents a 35-point gain from the steepest decline of 44% for the week ending April 12, according to NPD’s CREST®Performance Alerts.
Customer transactions at major quick service restaurant chains, which represent the bulk of industry transactions, were down 8% compared to year ago. Full service chain restaurants, which were most impacted by the mandated dine-in closures that are slowly being lifted, realized customer transactions declines of 19% versus a year earlier for a 57-point gain from the steepest year-over-year decline of 76% in week ending April 12.
“Although transactions are still down, the move into the single-digits is a positive sign for the U.S. restaurant industry,” says David Portalatin, NPD food industry advisor. “Although we’re stuck in neutral for now, I firmly believe there is still a lot of upside recovery for restaurants. My belief is rooted in one reality: consumers are not willing to give up on the convenience and experience a restaurant meal brings to them and their families regardless of the barriers.”