Negotiated cash fed cattle trade was slow to moderate on light demand in Nebraska through Thursday afternoon. Dressed trade was unevenly steady with the previous week at $173/cwt. There were a few live sales at $109, but too few to trend; $109-$110 last week.
Trade was limited on light demand in Kansas with a few live trades at $110, which was steady with the previous day and week.
Elsewhere, trade was mostly inactive on light demand, according to the Agricultural Marketing Service. Live trade in the Texas Panhandle on Wednesday was at $110, steady to $1 lower than last week. Trade in Colorado on Wednesday was steady to $1 higher at $109-$110.
Last week, live sales in the western Corn Belt were at $108-$109; dressed trade at $173.
Although steady to weak cash prices are a disappointment this week, Live Cattle futures stabilized and gained Thursday, likely helped along by rising wholesale beef values. Feeder Cattle also continued to extend gains. Positioning ahead of Friday’s Cattle on Feed report likely played a role, too.
Live Cattle futures closed an average of 46¢ higher, from 2¢ higher at the back to $1.07 higher toward the front.
Feeder Cattle futures closed an average of 72¢ higher, from 2¢ to $1.62 higher, except for unchanged in the back contract.
Choice boxed beef cutout value was $2.29 higher Thursday afternoon at $221.20/cwt. Select was $3.00 higher at $210.28.
The average dressed steer weight the week ending Jan. 9 was 923 lbs., which was 3 lbs. heavier than the prior week and 19 lbs. heavier than the prior year, according to the USDA Actual Slaughter Under Federal Inspection report. The average dressed heifer weight of 851 lbs. was the same as a week earlier but 17 lbs. heavier than the same week a year earlier. Total cattle slaughter for the week of 652,330 head was 9,420 head more year over year. Beef production for the week of 549.1 million lbs. was 19.6 million lbs. more than the previous year.
Corn futures closed 1¢ to 3¢ higher through the front three contracts and then mostly unchanged to fractionally mixed.
Soybean futures closed 1¢ to 3¢ lower, except for fractionally higher to 2¢ higher in the front three contracts.
Major U.S. financial indices closed narrowly mixed Thursday. Positive news included slightly fewer initial unemployment insurance claims than investors expected.
Initial unemployment insurance claims for the week of Jan. 16 were 900,000, according to the U.S. Department of Labor.
The Dow Jones Industrial Average closed 12 points lower. The S&P 500 closed 1 point higher. The NASDAQ was up 73 points.
U.S. beef exports to China were record high from July through November of last year, suggesting progress and promise, but still represented less than 1% of the beef imported by that nation, according to USDA’s Economic Research Service (ERS). U.S. beef competitors accounted for 94% of China beef imports during that period.
“In part, this may be because the U.S. value per pound of total (bone-in and boneless) beef shipped to China is higher than that of most of its competitors in the China beef market,” ERS analysts explain, in the latest monthly Livestock, Dairy and Poultry Outlook.
ERS compared the unit values of China’s frozen boneless beef imports to help assess U.S. competitiveness. For January through November, U.S. unit value was $3.23/lb., compared to $1.90 to $2.79/lb. for Argentina, Uruguay, Brazil, New Zealand, and Australia. Those latter countries comprise most of China’s beef imports. Incidentally, the unit cost of Canadian imports to China was $4.01/lb.
“…A higher U.S. beef price reflects a better quality, grain-fed fresh/chilled product, which is different from what China typically imports from other countries,” ERS analysts explain.
For context, total U.S. beef exports in November of 277 million lbs. were 32 million lbs. (+13%) more year over year, driven mainly by moderate global economic recovery, according to ERS.
“China’s demand for animal proteins will continue to grow as its economy and population expand,” say ERS analysts. “Despite a higher unit price of U.S. beef and certain barriers that limit trade, China’s commitment to purchase an additional $200 billion of American-made goods and services over 2020 and 2021, under the U.S. China Phase 1 trade deal, could lead to continued growth of U.S. beef exports.”