Negotiated cash fed cattle trade remained undeveloped through Thursday afternoon.
Cattle futures closed mainly narrowly mixed with pressure in the front months,
likely on positioning and perhaps some defensiveness ahead of tomorrow’s Cattle on Feed (COF) report. That will be the Jan. 25 report, due to the government shutdown. The COF originally slotted for Feb. 22 is scheduled to be released Mar. 8. In between, the Cattle inventory report, which should have been published Jan. 31 is scheduled for release Feb. 28.
Amid growing open interest, Live Cattle futures closed an average of 46¢ lower through the front three contracts (7¢ to 70¢ lower) and then an average of 11¢ higher.
Feeder Cattle futures closed an average of 44¢ lower through the front three contracts (12¢ to 65¢ lower) and then an average of 17¢ higher.
Corn futures closed 3¢ to 4¢ higher across the front half of the board, and then mostly 1¢ to 2¢ higher, amid chatter that China is poised to buy more U.S. corn and soybeans than previously thought.
Soybean futures closed 4¢ to 8¢ higher across the front half, and then mostly 3¢ higher.
Wholesale beef values were higher on Choice and steady on Select with moderate to good demand and light to moderate offerings, according to the Agricultural Marketing Service.
Choice boxed beef cutout value was $1.58 higher Thursday afternoon at $218.07/cwt. Select was 9¢ lower at $211.41.
Major U.S. financial indices closed lower Thursday, pressured by various closely watched economic indicators pointing to slower economic growth, building on caution expressed in the Federal Reserve minutes released Wednesday.
For instance, the IHS Markit Flash U.S. Manufacturing Purchasing Manager Index dropped to a 17-month low for February at 53.7. It was 54.9 in January.
Likewise, the Conference Board Leading Economic Index® (LEI) for the U.S. declined 0.1% in January to 111.3
“In January, the strengths in the financial components were offset by the weaknesses in the labor market components,” says Ataman Ozyildirim, Director of Economic Research at The Conference Board. “The US LEI has now been flat essentially since October 2018. The Conference Board forecasts that U.S. GDP growth will likely decelerate to about 2% by the end of 2019.”
The Dow Jones Industrial Average closed 103 points lower. The S&P 500 closed 9 points lower. The NASDAQ was down 29 points.
Expectations for U.S. beef imports this year increased by $100 million to $7.7 billion, in the latest Outlook for U.S. Agricultural Trade from USDA’s Economic Research Service (ERS).
“Livestock, dairy, and poultry export forecasts are raised $300 million to $30.4 billion, largely as gains in beef, pork, poultry, dairy, and other products offset declines for hides, skins, and furs,” ERS analysts say. “The beef forecast is raised on sustained demand despite stronger prices.”
On the other side of the ledger, forecast beef import value was also increased by $100 million, based on stronger than expected prices.
For context, ERS analysts explain, per capita world GDP growth of 1.9% last year was the heftiest since the post-financial crisis rebound in 2010-11.
“World GDP growth is expected to slow slightly to 1.6% in 2019, due in part to global trade tensions, but there is some optimism regarding future dialogue between China and the United States,” say ERS analysts. “There is more uncertainty than normal regarding U.S. economic conditions due to a lag in the release of economic indicators after the Government shutdown, such as U.S. Gross Domestic Product for the fourth quarter and U.S. International Trade in Goods and Services for December 2018. However, U.S. per capita GDP was estimated to have grown at above trend at 2.2% in 2018 and is forecast to remain the same in 2019, with continued optimism regarding the current economic landscape, especially given the strong labor market and low inflation.”