Feedlots and packers continued their standoff on negotiated cash fed cattle trade, which remained largely undeveloped through Friday afternoon. Trade ranged from slow on light demand to a standstill, according to the Agricultural Marketing Service. There were a few FOB live sales in the western Corn Belt at $185-$186/cwt., but too few to trend.
Last week, live prices (FOB) were $180/cwt in the Southern Plains and $188 in Nebraska and the western Corn Belt, where dressed prices (FOB) were $295.
Choice boxed beef cutout value was 86¢ lower Friday afternoon at $302.00/cwt. Select was $2.22 lower at $277.54/cwt.
Further erosion in Corn futures helped Feeder Cattle futures close an average of 77¢ higher Friday.
Live Cattle futures closed narrowly mixed, from an average of 10¢ lower in the back three contracts to an average of 15¢ higher.
Corn futures continued to decline Friday, pressured by more favorable weather in the Corn Belt and less risk premium tied to Ukrainian grain shipments. They closed 11¢ to 12¢ lower through Jly ‘24 and then mostly 6¢ to 9¢ lower.
KC HRW Wheat closed 4¢ to 10¢ lower through Sep ‘24 and then mostly 2¢ lower.
Soybean futures closed mostly 8¢ to 15¢ lower through Jan ‘25 and then mostly 2¢ lower.
Major U.S. financial indices closed higher Friday with another gauge of cooling inflation.
The Personal Consumption Expenditures (PCE) price index increased 0.2% month to month in June, according to the U.S. Bureau of Economic Analysis. That was in line with expectations. Core PCE, excluding food and energy was slightly less than expected year over year at 4.1%.
The Dow Jones Industrial Average closed 176 points higher. The S&P 500 closed 44 points higher. The NASDAQ was up 266 points.
West Texas Intermediate Crude Oil futures (CME) closed 44¢ to 69¢ higher through the front six contracts.
Estimated total cattle slaughter last week of 619,000 head was 5,000 head fewer than the previous week and 47,000 head fewer (-7.1%) than the same week last year. Year-to-date estimated total cattle slaughter of 18.7 million head was 751,000 head fewer (-3.9%) year over year. Estimated year-to-date beef production of 15.3 billion pounds was 773.8 million pounds less (-4.8% less) year over year.
“Most of the decline in beef production compared to a year ago stems from reduced beef cow slaughter, steer slaughter, and lighter slaughter weights,” says Andrew P. Griffith, agricultural economist at the University of Tennessee, in his weekly market comments. “Beef cow slaughter is down more than 12% while steer slaughter has declined close to 5%. Alternatively, dairy cow slaughter has increased nearly 6% compared to a year ago due to declining milk prices.”
Griffith points out heifer slaughter is less 1% lower year over year, further affirming that fact that heifer retention has yet to begin.
“All of these points should support beef prices remaining elevated in the near term and in the longer term,” Griffith explains. “It will be interesting to see how imports are adjusting to meet the demand for lean grinding beef, given the production decline domestically. Export data will also help solidify the beef availability picture.”