Cash fed cattle trade remained undeveloped through Wednesday afternoon.
There were only 250 head offered in the weekly Fed Cattle Exchange auction, and no takers.
Cattle futures closed either side of steady with no direction from the cash market, biding time for Thursday’s monthly Cattle on Feed report and little trading interest.
Live Cattle futures closed marginally mixed, (an average of 13¢ lower through the front three contracts and then an average of 12¢ higher).
Other than unchanged in spot Jan, Feeder Cattle futures closed an average of 24¢ lower.
Corn futures closed 2¢ to 3¢ lower through Jul ’20 and then mostly fractionally lower.
Soybean futures closed most 5¢ to 7¢ lower.
Wholesale beef values were lower on Choice and steady on Select with light to moderate demand and light offerings, according to the Agricultural Marketing Service.
Choice boxed beef cutout value was 98¢ lower Wednesday afternoon at $211.70/cwt. Select was 12¢ higher at $204.85.
Major U.S. financial indices closed sharply lower Wednesday in turbulent trade that turned from positive to negative following the Fed announcement it was raising interest rates another 0.25%, marking the fourth increase this year. Though anticipated, the market seemed to be hoping for a reprieve, given the recent volatility of markets and expectations for slower global economic growth.
“A statement from the FOMC explained, in part: “Information received since the Federal Open Market Committee met in November indicates that the labor market has continued to strengthen and that economic activity has been rising at a strong rate. Job gains have been strong, on average, in recent months, and the unemployment rate has remained low. Household spending has continued to grow strongly, while growth of business fixed investment has moderated from its rapid pace earlier in the year. On a 12-month basis, both overall inflation and inflation for items other than food and energy remain near 2%. Indicators of longer-term inflation expectations are little changed, on balance.”
The Dow Jones Industrial Average closed 351 points lower. The S&P 500 closed 39 points lower. The NASDAQ was down 147 points.
Live cattle are also contributing to the positive U.S. beef export picture.
“October cattle exports were about 29% higher than a year ago at 44,203 head,” say analysts with USDA’s Economic Research Service (ERS), in the December Livestock, Dairy and Poultry Outlook. “Despite exports to Mexico of less than half year-earlier levels, significantly higher exports to Canada resulted in the highest monthly export volume recorded since October 2001.”
Apparently Canadian cattle feeders are backfilling needed placements resulting from increasing fed cattle slaughter demand in tandem with continued flat herd growth.
“November through December is the peak placement season in Canada, which might support continued strong U.S. cattle shipments there as feedlots are sourcing cattle from the United States,” ERS analysts explain.
Besides Canada and Mexico, live cattle in October were exported to Qatar (2,184 head) and Russia (1,850 head), according to ERS.
The cattle export forecast for 2018 was revised upward by 40,000 head to 250,000 head. The cattle export forecast for 2019 increased by 40,000 head to 255,000 head.
On the other side of the ledger, October cattle imports to the U.S.—primarily from Canada and Mexico—were 167,968 head, which was 20% more than a year earlier. For January through October, there were 1.497 million head of cattle imported to the U.S., about 82,000 head more than the previous year.