Negotiated cash fed cattle trade was limited on light demand in Nebraska and the western Corn Belt through Tuesday afternoon, according to the Agricultural Marketing Service (AMS). Although too few to trend, there were a few dressed trades at $195/cwt., compared to $190-$191 last week. Elsewhere, trade ranged from mostly inactive on very light demand to a standstill.
Live prices last week were at mostly $119-$120 in the Southern Plains, $120 in Nebraska and $120-$121 in the western Corn Belt.
The recent decline in Corn futures moderated Tuesday but continued to bolster Cattle futures, which were also supported by the outlook for steady to higher cash prices this week.
Feeder Cattle futures closed an average of $1.34 higher (62¢ to $2.22 higher).
Live Cattle futures closed an average of $1.91 higher through the front four contracts ($1.32 to $1.62 higher) and then an average of 26¢ higher, except for 12¢ lower in the back two contracts.
Choice boxed beef cutout value was $1.04 lower at $334.43/cwt. Select was $5.13 lower at $298.28. At $36.15, the Choice/Select spread was the highest since June 2017, when it peaked at $30.92.
Grain futures continued mainly lower Tuesday with the progress-friendly weather forecast in the Corn Belt.
Corn futures closed mostly 3¢ to 7¢ lower, except for 8¢ higher in spot Jly.
Soybean futures closed mostly 17¢ to 21¢ lower.
Major U.S. financial indices softened Tuesday, with weaker economic data.
Advance estimates of U.S. retail and food services sales for May 2021 were less than expected at $620.2 billion, a decrease of 1.3% month to month, according to the U.S. Census Bureau.
The Producer Price Index (PPI) for final demand increased 0.8% in May, according to the U.S. Bureau of Labor Statistics. On an unadjusted basis, the final demand index advanced 6.6% for the 12 months ended in May, the largest increase since 12-month data were first calculated in November 2010.
The Dow Jones Industrial Average closed 94 points lower. The S&P 500 closed 8 points lower. The NASDAQ was down 101 points.
U.S. beef exports this year are forecast to exceed the level of the last two years and perhaps that of the record year in 2018, according to Derrell Peel, Extension livestock marketing specialist at Oklahoma State University.
As noted in Cattle Current last week, U.S. beef exports set another new value record in April at $808.3 million, up 35% from a year ago, according to data released by USDA and compiled by the U.S. Meat Export Federation. Export volume was 23% more year over year and the fifth largest on record at 121,050 metric tons (mt).
“Beef exports represent a component of total beef demand in terms of quantity and value,” Peel says, in his weekly market comments. “Moreover, beef exports represent a wide range of product types and qualities exported to various markets and augment domestic beef demand by providing markets for products less desired in the U.S.” He explains exporting products that have more value to international consumers than domestic ones enables maximizing domestic beef value.
U.S. beef export value per head of fed slaughter reached a new monthly high in April at $367.45.
More broadly, total global food and agricultural exports grew by almost $52 billion last year (+3.2% annualized), according to the Food and Agriculture Organization of the United Nations (FAO). Developing countries accounting for about 40% of the increase.
This year, FAO forecasts global agricultural exports to increase 8%, or $137 billion. Much of that growth reflects demand from East Asia.
FAO analysts expect meat production this year to increase 2% to 346 million tons, reflecting an anticipated rebound in meat production in China, especially for pork.
“The average worldwide consumer price of protein in May 2021 was 23% above its May 2020 level,” according to FAO’s semiannual Food Outlook. “Calories, in prices, meanwhile, were up 34% year-on-year and hit their highest level since February 2013. The difference reflects stronger price rises for wheat, coarse grains and vegetable oils compared to meats, dairy products and fish.”