Negotiated cash fed cattle trade perked up Wednesday, but too few transactions to trend, according to USDA reports.
There were 1,189 head offered in the weekly Fed Cattle Exchange auction, with 860 head selling for a weighted average price of $118.36/cwt. for delivery at 1-9 days. That was three lots from Kansas and Nebraska.
Cattle futures sagged lower Wednesday, perhaps pressured by seasonally declining wholesale beef values and the lack of cash direction.
Live Cattle futures closed an average of $1.06 lower.
Feeder Cattle futures closed an average of $1.56 lower.
Wholesale beef values were sharply lower on light demand and heavy offerings, according to the Agricultural Marketing Service.
Choice boxed beef cutout value was $3.20 lower Wednesday afternoon at $226.95/cwt. Select was $2.00 lower at $210.31.
Corn futures closed 1¢ to 3¢ higher through Sep ’20 and then mostly fractionally lower.
Soybean futures closed 3¢ to 7¢ higher through Sep ’21 and then mostly 1¢ higher.
Major U.S. financial indices closed higher Wednesday, supported by a bounce in energy and positive rhetoric about the U.S.-China trade talks.
West Texas Intermediate crude oil futures (CME) closed $2.02-$2.33 higher through the front five contracts.
The Dow Jones Industrial Average closed 146 points higher. The S&P 500 closed 19 points higher. The NASDAQ was up 46 points.
The Upper House of the Japanese Parliament approved the U.S.-Japan trade agreement yesterday, which will greatly improve access for U.S. red meat in Japan, according to the U.S. Meat Export Federation (USMEF).
“With the U.S.-Japan trade agreement now approved by the Japanese Parliament, the U.S. beef and pork industries look forward to expanded opportunities in Japan, which is already the largest value destination for U.S. pork and beef exports (combined export value in 2018 was $3.7 billion),” says Dan Halstrom, USMEF president and CEO. “This agreement is one of the biggest developments in the history of red meat trade, as no international market delivers greater benefits to U.S. farmers and ranchers, and to the entire U.S. supply chain, than Japan.”
USMEF’s projected impact on U.S. beef and pork exports to Japan:
With tariff rates mirroring those imposed on major competitors, USMEF’s forecast for 2020 is for U.S. beef and pork exports to Japan to reach $2.3 billion and $1.7 billion, respectively.
USMEF projects that by 2025, U.S. red meat exports to Japan will approach $5 billion—roughly $2.8 billion for U.S. beef and more than $2 billion for U.S. pork—as consumption of U.S. red meat increases due to greater access for Japanese consumers and the U.S. gaining market share.
Moreover, the agreement also opens new opportunities for value-added and processed red meat products, with tariffs on these products phasing to zero, which contributes to the overall growth in U.S. exports to the high-value Japanese market.