Negotiated cash fed cattle prices began to take shape through Thursday afternoon. Live prices in the Southern Plains were steady at $124/cwt. Although too few to trend, early dressed prices up north were steady to $2 lower at $198-$200, based on USDA reports.
Although backing away from session lows, reduced momentum in the cash market helped push Cattle futures lower, as did likely selling and profit taking by those who provided fuel ahead of the phase-one trade agreement between the U.S. and China. That and Senate ratification of the U.S.-Mexico-Canada Agreement (USMCA), which replaces the North American Free Trade Agreement (see below) hold plenty of promise, but plenty of questions remain.
Live Cattle futures close an average of 51¢ lower.
Feeder Cattle futures closed unchanged to an average of 27¢ lower through the front five contracts and then an average of 6¢ higher.
Wholesale beef values were firm to higher on moderate to fairly good demand and moderate offerings, according to the Agricultural Marketing Service.
Choice boxed beef cutout value was 37¢ higher Thursday afternoon at $212.90/cwt. Select was $1.80 higher at $211.47.
Corn futures closed 11¢ to 12¢ lower in the front three contracts and then mostly 5¢ to 7¢ lower.
Soybean futures closed 1¢ to 4¢ lower through Sep ’21 and then mostly 1¢ higher.
Major U.S. financial indices closed strongly higher Thursday, buoyed by positive economic news and quarterly earnings reports.
The Dow Jones Industrial Average closed 267 points higher. The S&P 500 closed 27 points higher. The NASDAQ was up 98 points.
The U.S. Senate, on Thursday, approved the U.S.-Mexico-Canada Agreement (USMCA), which replaces the North American Free Trade Agreement (NAFTA).
“We’ve long waited for this day and now USMCA will finally head to the President’s desk,” said U.S. Secretary of Agriculture Sonny Perdue. “The passage of USMCA is great news for America’s farmers and ranchers. With Congressional consideration now complete, our farmers and ranchers are eager to see the President sign this legislation and begin reaping the benefits of this critical agreement.”
Canada and Mexico are the first and second largest export markets for United States food and agricultural products, totaling more than $39.7 billion food and agricultural exports in 2018, according to USDA.
All food and agricultural products that have zero tariffs under the North American Free Trade Agreement (NAFTA) will remain at zero tariffs. Since the original NAFTA did not eliminate all tariffs on agricultural trade between the United States and Canada, the USMCA will create new market access opportunities for United States exports to Canada of dairy, poultry, and eggs. In exchange, the U.S. will provide new access to Canada for some dairy, peanut, and a limited amount of sugar and sugar-containing products.
“This year, we’ve secured new agreements with Japan, China, Canada and Mexico—four of our largest trading partners—which gives producers greater market access for their products and a renewed sense of optimism heading into the 2020 growing season,” explained Iowa Secretary of Agriculture Mike Naig.
According to the U.S. International Trade Commission, Naig explained full implementation of USMCA could increase U.S. agricultural exports by $2.2 billion.
“The U.S. Senate moving quickly to approve USMCA reaffirms the United States’ commitment to two key trading partners, both of which are very important destinations for U.S. pork, beef and lamb,” says Dan Halstrom, president and CEO of the U.S. Meat Export Federation (USMEF).
Mexico and Canada account for about one-third of all U.S. red meat exports, according to USMEF. Shipments to Mexico and Canada in 2019 totaled about 1.25 million metric tons valued at $3.8 billion.