Most of the offering in Wednesday’s weekly Fed Cattle Exchange Auction sold—1,140 out of 1,777 head—but it was at lower money than cash trade last week.
Prices were basically $105/cwt. (weighted average) on a live basis and $166 in the beef—delivery for 1-17 days. That’s $1-$2 less than last week’s country trade for live cattle and $4 less on a dressed basis.
As for country trade, there were too few negotiated cash fed cattle sales to trend in any major cattle feeding region through mid Wednesday afternoon—a few live sales at $105/cwt. in Nebraska and the western Corn Belt; a few in the beef at $165-$166. That’s $2 less on a live basis than last week in those regions and $4-$5 lower dressed.
After moving lower early in the session with follow-through selling, Cattle futures eked out minimal gains at the close, presumably tied to profit taking.
Except for 7¢ and 22¢ lower in the back two contracts, Live Cattle futures closed an average of 24¢ higher.
Except for 15¢ and 42¢ lower at the back of the board, Feeder Cattle futures closed an average of 47¢ higher.
Choice boxed beef cutout value was 5¢ lower Wednesday afternoon at $191.72/cwt. Select was 33¢ higher at $191.12.
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Major U.S. financial indices close higher on Wednesday, supported by positive economic news, including a healthier increase in national employment than expected. According to the closely watched ADP National Employment report, private sector employment grew by 237,000 jobs last month.
The Dow Jones Industrial Average closed 27 points higher. The S&P 500 closed 11 points higher. The NASDAQ closed 66 points higher.
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U.S. exports must increase to accommodate the expanding U.S. cattle and beef industries, according to a new baseline report from RaboResearch Food and & Agribusiness (RRFA) group.
The RRFA report, Expanding Beef Production Increases the Need for Exports: U.S. Long-Term Beef and Cattle Baseline Outlook projects industry expansion lasting another 2-3 years and notes that the domestic industry is mature with a steady rate of beef consumption.
“In order for the beef market to remain in equilibrium, the U.S. will have to increase exports to be consistently above 10% of total production (greater than 3.1 billion lbs.), thereby also becoming a net exporter of beef,” according to the report.
“Population growth, along with improving middle-class incomes, are the global drivers behind the opportunity for increased beef exports,” notes RaboResearch Global Senior Data Analyst Sterling Liddell. “Conversely, beef imports into the U.S. face headwinds as an increased number of head available for slaughter combines with relatively persistent carcass weights to equal, or exceed, domestic demand levels.”
In the meantime, RRFA analysts expect demand for existing capacity to be high, and packers to enjoy the largest balance of market power through 2022.
The report provides an outlook through 2025 for U.S. beef and cattle industries.