Cattle futures softened to start the week, especially Feeder Cattle. Pressure likely included the anticipated packer slowdown during the next two holiday-shortened weeks, as well as technical correction.
Live Cattle futures closed an average of 77¢ lower.
Feeder Cattle futures closed an average of $1.70 lower ($1.20 to $2.45 lower).
Corn futures closed fractionally lower through Dec ’10 and then mixed.
Soybean futures closed 2¢ to 4¢ higher.
Wholesale beef values were firm to higher on moderate to good demand and light to moderate offerings, according to the Agricultural Marketing Service.
Choice boxed beef cutout value was $1.71 higher Monday afternoon at $212.67/cwt. Select was 62¢ higher at $203.76.
Major U.S. financial indices closed sharply lower again Monday, down about the same amount they were in the previous session. Concerns continued about slowing global economic growth and unresolved trade issues, in tandem with expectations the Fed will raise interest rates again Wednesday.
The Dow Jones Industrial Average closed 507 points lower. The S&P 500 closed 54 points lower. The NASDAQ was down 156 points.
“Packer demand has increased seasonally, and strong margins this year have likely encouraged packers to be strong buyers of cattle,” say analysts with USDA’s Economic Research Service (ERS), in the December Livestock, Dairy and Poultry Outlook. “For the week ending December 8, the weekly slaughter estimate was 667,000 head. This would be the highest weekly slaughter total since the week ending May 19. This demand is also reflected in prices offered for fed steers in the 5-area marketing region. In November, monthly prices finally broke out of the 5-month narrow price window of $109.90 to 112.20/cwt. to reach over $115. Further, for the week ending December 9, fed steer prices climbed to $118.11, though still below year-earlier levels. From last month, the forecast for fourth-quarter 2018 price for fed steers in the 5-area marketing region was raised to $113-$116/cwt. However, the annual forecast for 2019 fed steer prices was left unchanged $114-$122/cwt.
The aggressive slaughter pace pushed estimated beef production for this year 25 million lbs. higher to 26.9 billion lbs. ERS analysts note lighter carcass weights and less projected cow slaughter in the fourth quarter partially offset increased steer and heifer slaughter. Likewise, beef production for 2019 was reduced slightly based on the expectation of lighter carcass weights. Estimated beef production for next year was reduced by 25 million lbs. to 27.8 billion lbs.