Negotiated cash fed cattle trade was undeveloped through Wednesday afternoon. There were 1,684 head offered in the weekly Fed Cattle exchange auction and no takers.
Limited trading interest held Cattle futures to a narrow, though mostly slightly higher trading range.
Except for 32¢ lower in spot Feb, Live Cattle futures closed an average of 17¢ higher.
Other than 27¢ and 2¢ lower at either end of the board, Feeder Cattle futures closed an average of 15¢ higher, except for unchanged in Oct.
Corn futures closed mostly 2¢ to 3¢ higher through Jul ’20 and then mostly 1¢ higher.
Soybean futures closed 1¢ to 2¢ higher through Aug ’20 and then unchanged to fractionally lower.
Wholesale beef values were steady to firm on light to moderate demand and offerings, according to the Agricultural Marketing Service.
Choice boxed beef cutout value was 8¢ lower Wednesday afternoon at $218.05/cwt. Select was 43¢ higher at $213.00.
Major U.S. financial indices closed sharply higher Wednesday. Along with strong quarterly earnings from the likes of Boeing and Apple, support included the Fed standing pat on interest rates.
“The Committee continues to view sustained expansion of economic activity, strong labor market conditions, and inflation near the Committee’s symmetric 2% objective as the most likely outcomes,” according to a statement from the FOMC. “In light of global economic and financial developments and muted inflation pressures, the Committee will be patient as it determines what future adjustments to the target range for the federal funds rate may be appropriate to support these outcomes.”
The Dow Jones Industrial Average closed 434 points higher. The S&P 500 closed 41 points higher. The NASDAQ was up 154 points.
“While the need for increasing exports is clear, it’s frequently met with concern or skepticism among some producers and others in the supply chain,” says Will Sawyer, animal protein economist with CoBank’s Knowledge Exchange Division. He explains “Concerns lie primarily in the fear that themore exports play a role in supply and demand, themore exposure producers and industry participants have to increased market volatility and lower margins.”
Look to other protein sectors and other countries, however, and the reward of growing export markets outweighs the risk.
Greater reliance on export markets has resulted in higher prices for the animal protein sectors in other exporting nations, including Australia, Brazil and Canada, according to C0Bank. Analysis shows that greater profitability has offset price volatility for beef, pork and poultry producers in each of those countries, despite declining domestic consumption in both Australia and Canada.
“Profitable growth has always been at the core of the industry, and has enabled producers and processors to recover from the historic volatility and costs from 2007 through 2012,” Sawyer says. He adds, “The groundwork has already been laid from the supply chain, to industry representation, to let trade drive the industry forward over the next decade. Long-term, he says exports will be the key driver for further expansion across the animal protein sector.”
A video synopsis, and the full report, “Protein Passport: Exporting Your Way to Growth,” are available at cobank.com.