Negotiated cash fed cattle trade remained undeveloped through Wednesday afternoon.
Trends at fat cattle auctions were mixed. For instance, Choice 2-4 steers brought $129.23 to $129.83/cwt. at Tama, IA. On the other hand, significantly more Ch 2-4 steers (higher dressing) at Sioux Falls, SD brought $125.50-$126.75.
Only three lots of heifers (287 head) were offered in the weekly Fed Cattle Exchange auction on Wednesday, and no takers.
Even so, overall chatter continued to suggest higher prices when trade finally breaks loose this week, supported by strong beef fundamentals and the notion that packers appear to be even mort short-bought than last week.
Cattle futures basically paddled in place Wednesday, scooting forward a touch as traders awaited further cash direction.
Other than 17¢ lower in almost spent spot Feb, Live Cattle futures closed an average of 11¢ higher.
Feeder Cattle futures closed an average of 26¢ higher.
Corn futures closed 1¢ to 2¢ lower through Jul ‘20 and then mostly fractionally lower.
Soybean futures closed fractionally mixed.
Wholesale beef values were steady on Choice and lower on Select with light to moderate demand and offerings, according to the Agricultural Marketing Service.
Choice boxed beef cutout value was 21¢ lower Wednesday afternoon at $219.46/cwt. Select was 94¢ lower at $212.79.
Major U.S. financial indices continued to soften Wednesday, with many analysts attributing the decline to comments made by U.S. Trade Representative, Robert Lighthizer, which highlighted the distance left between the U.S. and China in trade talks.
Testifying before the House Ways and Means Committee, Lighthizer explained, “…we have engaged in a very intense, extremely serious, and very specific negotiation with China on crucial structural issues for several months now. We are making real progress. If we can complete this effort–and again I say ‘if’–and can reach a satisfactory solution to the all-important outstanding issue of enforceability, as well as some other concerns, we might be able to have an agreement that helps us turn the corner in our economic relationship with China. Let me be clear: much still needs to be done both before an agreement is reached and, more importantly, after it is reached, if one is reached.”
Support for the day included higher crude oil prices, supported by a decline in U.S. crude oil stockpiles last week, as well as indications OPEC is standing pat against President Trump’s request for that organization to loosen its restrictions on production.
The Dow Jones Industrial Average closed 72 points lower. The S&P 500 closed 1 point lower. The NASDAQ was up 5 points.
USDA’s latest Livestock Slaughter report offers some perspective on the beef and red meat production growth last year, as well as underscoring the impact winter weather had on beef production in December.
Fed cattle slaughter in December of 2.01 million head was 0.67% less (-13,500 head) than the previous December. December beef production of 2.12 billion lbs. was 1.52% less (-32.6 million lbs.) than the same month in 2017.
For all of 2018, fed cattle slaughter of 25.8 million head was 1.66% more (+421,800 head) than the previous year.
Year to year, fed heifer slaughter was 6.45% more at 9.12 million head, while fed steer slaughter was 0.80% less at 16.64 million head.
Dressed steer weights in December of 894 lbs. were 9 lbs. less than the same time a year earlier. Dressed heifer weights of 843 lbs. were 11 pounds less. For all of 2018, however, dressed steer weights were 3 lbs. more than the previous year at 880 lbs. Dressed heifer weights were 5 lbs. more at 817 lbs.
Total cattle slaughter last year of 32.52 million head was 2.57% more (+813,800 head) than the previous year.
Total beef production of 26.87 billion lbs. last year was 2.59% more (+679.6 million lbs.) than in 2017.
Total red meat production last year of 53.41 billion lbs. was 2.73% (+1.42 billion lbs.) more than the previous year.