Negotiated cash fed cattle trade was at a standstill in the Texas Panhandle through Thursday afternoon, according to the Agricultural Marketing Service. Elsewhere, it was limited on light demand with too few transactions to trend. So far this week, live prices are $2-$3 higher in the Southern Plains at $122/cwt., $4 higher in Nebraska at $124 and $3-$4 higher in the western Corn Belt at $124. Dressed prices are $4-$5 higher at $195.
Live Cattle futures closed sharply lower Thursday with apparent profit taking, limit-down moves in Lean Hog futures and spillover pressures from widespread commodity selling (see below).
Live Cattle futures closed an average of $2.85 lower.
Despite the pressure, sharply lower grain futures supported Feeder Cattle futures.
Feeder Cattle futures closed mixed, from an average of 49¢ lower to an average of 55¢ higher.
Choice boxed beef cutout value was $2.92 lower Thursday afternoon at $326.25/cwt. Select was $2.72 lower at $287.24.
The average dressed steer weight the week ending June 5 was 891 lbs., according to USDA’s Actual Slaughter Under Federal Inspection report. That was 1 lb. less than the previous year. The average dressed heifer weight of 812 lbs. was 12 lbs. lighter.
Grain futures tanked Thursday with promising weather in the Corn Belt. Growing uncertainty about whether President Biden will bolster or relax the current Renewable Fuel Standard added pressure, as did the sharply higher U.S. Dollar.
Moreover, there was broad-based commodity selling, tied to reports of China directing state-owned firms to reduce exposure to foreign commodity markets, in an effort to curb inflation.
Corn futures closed limit down 40¢ through the front six contracts, and then mostly 26¢ to 30¢ lower.
Soybean futures closed 82¢ to $1.18 lower through Jly ‘22. And then mostly 55¢ to 69¢ lower.
Major U.S. financial indices closed mixed Thursday. Along with continued pressure from the Fed’s expectation of raising interest rates a year earlier than previously intended, initial weekly unemployment insurance claims were more than expected. Those claims tallied 412,000 for the week ending June 12, up 37,000 from the previous week.
The Dow Jones Industrial Average closed 210 points lower. The S&P 500 closed 1 point lower. The NASDAQ was down 121 points.
Delays and congestion at U.S. ports continue to hamstring U.S. agriculture exports, including meat and poultry products.
“Perhaps the most egregious action perpetrated by ocean carriers is their growing proclivity to decline to carry U.S. agricultural commodity exports, including meat and poultry exports, instead choosing to hasten empty containers to Asian markets to fill them with more lucrative consumer goods to export to the U.S.,” explained Julie Anna Potts, Meat Institute president and CEO. “In some instances, common carriers are collecting freight rates as high as $12,000 per container to carry cargo from Asia to the U.S., while containers carrying U.S. agriculture exports earn only $1,800.” That was part of the testimony she delivered earlier this week to the House Committee on Transportation and Infrastructure Subcommittee On Coast Guard and Maritime Transportation.
Further, Potts explained ocean carriers and marine terminal operators are charging excessive and unreasonable detention and demurrage fees.
“Failure to hold these carriers accountable could have long-lasting, detrimental effects for the trade-dependent U.S. meat and poultry industry and agriculture sector which has caused $1.5 billion in lost revenue,” said Potts. “If current ocean carrier practices persist, and are not subject to oversight, then the U.S. meat and poultry industry, its workers and the communities it supports will struggle to access these vital markets that have been cultivated over decades.”
The U.S. Department of Agriculture estimates that the $141.6 billion in U.S. agricultural export value in 2019 generated an additional $160 billion in economic activity for a total of $301.6 billion in economic output.
The Meat Institute is urging U.S. Secretary of Agriculture Tom Vilsack and the Congress to confront the crisis as part of efforts to improve and strengthen the food supply chain.