Negotiated cash fed cattle trade ended up steady to $1 higher on a live basis last week at $112/cwt. in the Southern Plains, mostly $115 in Nebraska and $115-$116 in the western Corn Belt. Dressed sales were steady at $182-$185.
Week to week on Monday, the 5-area direct average price for fed steers was $113.68/cwt., 66¢ higher than the previous week.
Softer Lean Hog futures pressured Live Cattle after early-session support Monday. Higher grain futures weighed on Feeder Cattle.
Other than unchanged at either end of the board, Live Cattle futures closed an average of 44¢ lower.
Feeder Cattle futures closed an average of 99¢ lower, across a range of 70¢ lower at the back to $1.42 lower in spot Aug.
Corn futures closed mostly 1¢ to 2¢ higher.
Soybean futures closed mostly 3¢ to 5¢ higher
Wholesale beef values were higher on light to moderate demand and offerings, according to the Agricultural Marketing Service.
Choice boxed beef cutout value was $1.09 higher Monday afternoon at $213.26/cwt. Select was $1.42 higher at $189.76.
Major U.S. financial indices basically paddled in place Monday, amid mixed quarterly corporate earnings reports. The backdrop for the week includes the Fed meeting Wednesday and renewed trade negotiations between the U.S. and China.
The Dow Jones Industrial Average closed 28 points higher. The S&P 500 closed 4 points lower. The NASDAQ was down 36 points.
Weak hide prices continue to weigh on beef byproduct values.
“In the period 2013-2017, hide values (butt-branded, steer) averaged $74.36/piece (animal) and represented 52.3% of total byproduct value,” explains Derrell Peel, Extension livestock marketing specialist at Oklahoma State University, in his weekly market comments. “In 2018, hides represented 45.6% of byproduct value with an average value of $47.93/piece. In the first half of 2019, hides averaged $34.46/piece and accounted for 36.6% of total byproduct values. The June monthly average hide value was $27.60/piece. The global hide market continues to weaken.”
Overall, Peel says byproduct values declined from about $10.70/cwt. early in 2018 to about $9 by the end of the year.
“Byproducts represented 8.2% of fed cattle prices in 2018 at an average value of $9.60/cwt. on a live-weight basis,” Peel says. “The latest weekly byproducts value was $8.88/cwt for the week of July 26, 2019. For the first 29 weeks of 2019, by-products have averaged $8.78 or 7.2% of fed cattle prices.”
“Hide supplies are larger as a result of increased cattle numbers and slaughter, especially in Brazil and the U.S. Some hides are being salted and stockpiled which may limit value improvement going forward,” Peel explains. “China is the major global buyer of hides and demand in China is hampered by tariffs and trade disruptions and by stronger environmental regulations impacting small tanneries. Hide values are so low that more hides are being rendered in some markets and some hides are not worth marketing in other markets. In Australia, for example some hides are being exported for a loss simply because the cost of environmental regulations to dispose of the hides is a greater loss. Other factors affecting hide values are exchange rates and less demand for leather in luxury cars and footwear, which are using more synthetic materials.”