Feeder Cattle futures gained Thursday, closing an average $1.33 higher, helped by declining front-month Corn futures.
Live Cattle futures edged higher, supported by climbing wholesale beef prices, despite the sluggish packing pace. They closed an average 40¢ higher, except for unchanged in the back contract.
Choice Boxed beef cutout value was $2.93 higher Thursday afternoon at $282.86/cwt. Select was $1.78 higher at $272.76.
Negotiated cash fed cattle trade ranged from limited on light demand to a standstill through Thursday afternoon, according to the Agricultural Marketing Service. There were too few transactions to trend.
So far this week, live prices are $1-$2 lower in the Texas Panhandle at $136-$137/cwt. and $135-$136 in Kansas. They’re $1-$3 lower in Nebraska at $137 and steady to $3 lower in the western Corn Belt at $137-$138. Dressed trade is $2 lower at $218.
Corn futures closed 3¢ to 11¢ lower through the front four contracts, and then mostly 1¢ to 2¢ higher.
Soybean futures closed 11¢ to 26¢ lower through the front six contracts, and then mostly 2¢ to 3¢ higher.
Major U.S. financial indices closed lower Thursday with most of the pressure in tech stocks.
Despite strong quarterly corporate earnings reports, weekly jobless claims came in more than expected.
The advance figure for seasonally adjusted initial unemployment insurance claims was 230,000 for the week ending Jan. 8, according to the U.S. Department of Labor. That was 23,000 more than the previous week. The four-week moving average increased, too.
Although less than some feared, another closely-watched inflation barometer underscored the run-up in prices.
The Producer Price Index (PPI) for final demand increased 0.2% in December, seasonally adjusted, according to the U.S. Bureau of Labor Statistics. This rise followed advances of 1.0% in November and 0.6% percent in October. On an unadjusted basis, final demand prices moved up 9.7% in 2021, the largest calendar-year increase since data were first calculated in 2010.
The PPI measures the average change over time in the selling prices received by domestic producers for their output.
Prices for final demand less foods, energy, and trade services rose 0.4% in December, following a 0.8% increase in November. In 2021, the index for final demand less foods, energy, and trade services moved up 6.9%, following a 1.3% advance in 2020.
The Dow Jones Industrial Average closed 176 points lower. The S&P 500 closed 76 points lower. The NASDAQ was down 381 points.
USDA’s Foreign Agricultural Service (FAS) estimates global beef production this year at 58.2 million metric tons (mt) in the latest Livestock and Poultry World Markets and Trade. That’s slightly more than projected in the previous quarterly report (Oct.). It would be 585,000 mt more than 2021 (+1.0%).
“Brazil beef production is lowered 2% for 2021 due to disrupted sales to China in the fourth quarter. In September, Brazil reported detection of atypical bovine spongiform encephalopathy (BSE), causing China to temporarily restrict beef imports, leading to delayed slaughter of cattle over this time period,” according to the report. “In Australia, 2022 production is higher than previously forecast with herd rebuilding well underway and some slaughter deferred in December under adverse weather impacting transportation.”
FAS analysts note China’s beef supply is expected to be down nearly 1% this year with steady imports but lower projected domestic production. “Imports continue to make up an increasing share of consumption as the Chinese diet evolves and as domestic product struggles to compete on both price and quality,” they say.
In the meantime, net U.S. beef export sales for the week ending Jan. 6 were primarily to Japan, Mexico, South Korea, China and Egypt, according to the weekly U.S. Export Sales report.