Despite the surge in cash fed cattle prices late week, Cattle futures softened some on Monday, pressured by overall bearishness in commodities, tied to trade concerns. Seasonally limping wholesale beef values added to the negative tone.
Live Cattle futures closed an average of 44¢ lower (12¢ to $1.00 lower).
Except for 12¢ higher in Apr, Feeder Cattle futures closed an average of 44¢ lower (15¢ to 75¢ lower).
Boxed beef cutout values were lower on Choice and steady on Select with light to moderate demand and heavy offerings, according to the Agricultural Marketing Service.
Choice boxed beef cutout value was $1.11 lower Monday afternoon at $206.92/cwt. Select was 9¢ lower at $198.62.
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Major U.S. financial indices closed higher Monday, extending gains from the previous session. Support included Friday’s strong employment report, and apparently high hopes heading into quarterly earnings.
The Dow Jones Industrial Average closed 320 points higher. The S&P 500 closed 24 points higher. The NASDAQ closed 67 points higher.
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U.S. beef exports set a new monthly value record in May at $722.1 million, which was 24% more than a year earlier and 4% more than the previous record, according to data released by USDA and compiled by the U.S. Meat Export Federation (USMEF). In terms of volume, May beef exports of 117,871 metric tons (mt) were the sixth most on record.
“Despite the intense competition U.S. beef faces in Japan and Korea, these markets continue to display a terrific appetite for a growing range of cuts,” says Dan Halstrom, USMEF President and CEO. “Beef items that are traditionally popular in Asia continue to perform and other items more suitable for thick-cut steaks and barbecue concepts are gaining more traction, resulting in exceptional growth opportunities. But the enthusiasm for U.S. beef extends well beyond these two leading markets, and that’s how exports have reached this record-breaking pace.”
Export volume to Japan in May was 19% more year over year, with value 22% higher at $196.8 million. Exports to Korea for the month were 46% more in terms of volume and 64% more in value at a record $146.2 million.
Through the first five months of this year, total U.S. beef exports were up 10% in volume to 547,157 mt, while export value was 21% more than last year’s record pace at $3.32 billion.
Beef export value averaged $313.39 per head of fed slaughter in May, up 18% from a year ago. The January-May average was $317.69 per head, also up 18%.
For U.S. pork exports, though, the weight of recent tariffs is beginning to take a toll.
For instance, pork exports to the China/Hong Kong region were 31% less than a year earlier for volume and 25% less for value. According to USMEF, the decline was due in part to the additional 25% tariff increase imposed by China in April.
“Exports to China will face an even steeper challenge in the second half of 2018, as China recently hiked the duty rate on U.S. pork by another 25%,” according to USMEF. “This means U.S. pork cuts and pork variety meat entering China now face a duty rate of 62%, compared to 12% for China’s other suppliers, including the European Union, Brazil and Canada.”
Moreover, Mexico’s retaliatory duties on U.S. pork took effect in June, so these January-May results were not directly impacted.