Cattle futures edged lower and closed off of session lows on Monday with little support.
Other than 95¢ lower in spot Aug and narrowly mixed in the back four contracts, Live Cattle futures closed 37¢ lower.
Except for 7¢ higher in Apr, Feeder Cattle futures closed an average of 38¢ lower.
Choice boxed beef cutout value was $1.30 lower Monday afternoon at $217.54/cwt. Select was 16¢ higher at $202.67.
Major financial indices closed little changed on Monday, but with some upward push from tech stocks.
The Dow Jones Industrial Average closed 5 points lower. The S&P 500 closed 2 points higher. The NASDAQ closed 23 points higher.
“There is a growing recognition that international beef trade will play an increasingly important role in the U.S. beef industry in the coming years,” says Derrell Peel, Extension livestock marketing specialist at Oklahoma State University, in his weekly market comments. While exports typically receive the most focus, Peel points out imports of beef to the U.S. also vary significantly over time.
So far this year (through May) Peel explains total beef imports to the U.S. are 9% less year over year. They were 10.5% less year over in 2016.
Canada is currently the largest source of U.S. beef imports, Peel says. May beef imports from Canada 3.4% more year over year are 3.6% less year to date.
“Canada accounts for about 23% of beef imports in 2017,” Peel explains. “Canada has varied as the number one, two or three source of U.S. beef imports in the last 10 years. However, Canada’s share of U.S. beef imports appears to have trended down some over time with the current share considerably lower than the 27% average over the past decade.”
Historically, the U.S. imports more beef from Australia than Canada, but a period of herd rebuilding there, following forced herd liquidation due to drought has pushed imports to the U.S. 34% lower year over year, according to Peel. As the Australian herd expands, he expects that nation to recover market share in the U.S. market.
“The clearest and most pronounced trend in U.S. beef imports is the growing role of Mexico as a source of beef imports,” Peel says. “In May, beef imports from Mexico were up 27.4% year over year and are up 29.7% for the year to date. Mexico, which accounted for less than 2% of beef imports a decade ago, increased to account for over 16% of U.S. beef imports in 2016 and represents 20% of beef imports so far in 2017.”