Packers up north got a head start on the holiday-shortened week Monday, paying steady to $3 less for negotiated cash fed cattle at $153/cwt. on a dressed basis in the western Corn Belt.
The five-area average direct fed steer price last week was $96.21/cwt. on a live basis, which was $4.57 less than the prior week. The average steer price in the beef was $154.78, which was $5.92 less. Prices the same week last year were $110.13 and $179.02, respectively.
Even so, Cattle futures ended Monday higher, helped along by outside markets and despite the bounce in Corn futures. Higher wholesale beef values also helped.
Live Cattle futures closed an average of 64¢ higher.
Except for 20¢ lower in the back contract, Feeder Cattle futures closed an average of 50¢ higher.
Choice boxed beef cutout value was $1.19 higher Monday afternoon at $208.36/cwt. Select was $1.86 higher at $200.71.
Grain futures traded higher, perhaps buoyed by positioning ahead of Tuesday’s Grain Stocks and Acreage reports due from USDA.
Corn futures closed 7¢ to 9¢ higher through Sep ’21 and then 4¢ to 6¢ higher.
Soybean futures closed mostly 1¢ higher through Jan ’21 and then mostly 5¢ to 6¢ higher.
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Major U.S. financial indices on Monday bounced back from steep losses in the previous session.
Positive news on the day included a record rebound in pending home sales, according to the National Association of Realtors® (NAR).
The Pending Home Sales Index, a forward-looking indicator of home sales based on contract signings, rose 44.3% to 99.6 in May, the stoutest month-over-month gain since NAR started the series in January 2001. However, contract signings were 5.1% less year over year.
“The outlook has significantly improved, as new home sales are expected to be higher this year than last, and annual existing-home sales are now projected to be down by less than 10%, even after missing the spring buying season due to the pandemic lockdown,” says Lawrence Yun, NAR’s chief economist.
The Dow Jones Industrial Average closed 580 points higher. The S&P 500 closed 44 points higher. The NASDAQ closed 116 points higher.
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“After the disappointing shortages and high beef prices during Memorial Day, the improved beef situation for this grilling holiday is a great relief,” says Derrell Peel, Extension livestock marketing specialist at Oklahoma State University. “Grocery stores should be well stocked in time for July 4 and retail prices are adjusting down rapidly. For individual stores, it may depend on their particular supply arrangements.”
In his weekly market comments, Peel explains actual slaughter for the week ending June 13 exceeded year-ago levels for the first time since the first week of April.
Of course, supplies of competing meats are growing, too.
Although decreased broiler chick placements in April and May will likely lead to a modest third-quarter decrease in production, Peel says total production for beef, pork and broilers is projected to increase to a new annual record this year.
As for pork, Peel explains, the most recent Quarterly Hogs and Pigs (June) report pegged the total hog inventory at 79.6 million head, up 5.2% year over year and 3.0% more than in March.
According to Peel, beef production this year is projected at 27.41 billion lbs., 0.6% more than last year. Pork production for the year is estimated to be 3.4% more the last year at 28.47 billion lbs. and broiler production is projected 1.7% more at 44.16 billion lbs. Total red meat and poultry production is projected to be 1.9% more than last year at 106.74 billion lbs.