Stellar cash demand for calves and feeder cattle, along with steady to stronger cash fed cattle prices last week helped Cattle futures extend gains Monday.
Feeder Cattle futures closed an average of 65¢ higher (10¢ higher at the back to $1.00 higher).
Live Cattle futures closed an average of 40¢ higher.
Negotiated cash fed cattle trade ranged from mostly inactive with very light demand to a standstill through Monday afternoon, with too few transactions to trend, according to the Agricultural Marketing Service.
Last week, live prices were steady to $1 lower in the Southern Plains at $178/cwt., $1.00 to $1.50 higher in Nebraska at $183.00-$186.50 and steady to $2 higher in the western Corn Belt at $182-$184. Dressed prices were steady at $290.
The five-area direct weighted average fed steer price last week was $182.06 on a live basis, up 73¢ from the previous week. The average fed steer price in the beef was 65¢ higher at 289.99.
Choice boxed beef cutout value was $3.11 lower Monday afternoon at $313.79/cwt. Select was $3.30 lower at $282.33/cwt.
Corn and Soybean futures closed higher on likely profit taking and positioning ahead of Wednesday’s World Agricultural Supply and Demand Estimates.
Corn futures closed mostly 4¢ to 5¢ higher.
Soybean futures closed 17¢ to 27¢ higher through Aug ’24 and then mostly 12¢ to 15¢ higher.
KC HRW Wheat closed mostly 3¢ to 7¢ lower.
Major U.S. financial indices closed higher Monday as investors await further inflation readings this week, as well as the beginning of quarterly stock earnings reports.
The Dow Jones Industrial Average closed 209 points higher. The S&P 500 closed 10 points higher. The NASDAQ was up 24 points.
West Texas Intermediate Crude Oil futures (CME) closed 50¢ to 87¢ lower through the front six contracts.
The U.S. beef industry trend toward tightening cattle supplies, decreased beef production and sharply higher prices are expected to impact international trade of U.S. cattle and beef, according to Derrell Peel, Extension livestock marketing specialist at Oklahoma State University.
“Reduced beef supplies and higher prices are projected to lead to reduced beef exports and increased beef imports,” Peel explains in his weekly market comments. “The strength of the U.S. dollar and the impacts of exchange rates may further exaggerate or mute these underlying market forces. The relatively strong dollar in recent months has tended to dampen beef exports and support increased imports. Unique market factors in specific countries will also impact trade flows in particular markets. The most recent trade data confirms that the expected impacts are indeed developing.”
As noted in last Friday’s Cattle Current, U.S. beef exports in May were 14% less year over year for volume and down 19% for value. For January through May, volume was 10% less than the same period last year and value was down 21%.
On the other side of the equation, Peel says total beef imports to the U.S. were up 5.7% year over year in May. He adds that imports for the first five months of the year are 0.6% less than the same time last year.
“Beef imports appear to be reverting to more traditional import patterns with May imports of beef from Australia up 39.1% and imports from New Zealand up 23.2 % for the month,” Peel says. By volume, Peel explains these are the top five importers to the U.S. in this order: Canada, Mexico, Brazil, Australia and New Zealand.
“Beef imports will continue to be supported by higher domestic beef prices and the reduction in U.S. processing beef supplies due to reduced cow slaughter,” Peel says.