Cattle Current Daily—July 17, 2020

Cattle Current Daily—July 17, 2020

Cattle futures stepped higher Thursday, supported by firmer cash prices, chatter about the low for fed cattle being established and an increase in weekly exports.

Net beef export sales of 27,800 metric tons for the week ending July 9 were up noticeably from the previous week and up 68% from the prior four-week average, according to the U.S. Export Sales report from USDA’s Foreign Agricultural Service. Increases were primarily for South Korea, Japan, Mexico, Taiwan, and Canada.

Live Cattle futures closed an average of $1.33 higher (67¢ to $2.05 higher).  

Feeder Cattle futures closed an average of $1.92 higher (67¢ to $3.20 higher).

Choice boxed beef cutout value was 4¢ higher Thursday afternoon at $200.80/cwt. Select was 7¢ lower at $191.30.

Corn futures closed mostly 1¢ to 3¢ higher.

Soybean futures closed 7¢ to 8¢ higher through Mar ’21 and then mostly 4¢ higher.

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Major U.S. financial indices closed lower amid mixed economic news.

Although 10,000 fewer than the previous week, initial jobless claims of 1.3 million, reported by the U.S. Department of Labor, were more than traders expected.

On the other hand, U.S. retail sales beat expectations, climbing 7.5% month to month in June, according to the U.S. Census Bureau.

The Dow Jones Industrial Average closed 135 points lower. The S&P 500 closed 10 points lower. The NASDAQ closed 76 points lower.

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Based on the monthly Cattle on Feed report, USDA’s Economic Research Service (ERS) estimated 971,000 head of cattle on feed more than 150 days, as of June 1, which was 42% more than the same time last year.

“With expectations of steadying demand for slaughter cattle and a large number of market-ready cattle in feedlots, price forecasts (fed cattle) for both the third and fourth quarters were lowered by $4 to $100/cwt. and by $3 to $103, respectively,” says ERS analysts, in the latest monthly Livestock, Dairy and Poultry Outlook.

In turn, expected higher fed cattle slaughter and increased feedlot marketings should improve demand for feeder cattle, according to those analysts. 

ERS projects the average feeder steer price (basis Oklahoma City) at $133/cwt. in the third quarter and $131 in the fourth quarter for an annual average of $131.70. Prices are projected at $129 in the first quarter of next year and at $132 in the second.

2020-07-16T18:27:38-05:00

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