Cattle futures, especially Feeder Cattle, recovered from sharp losses early to close from narrowly mixed to a touch higher. Early pressure came from rising front-month Corn futures. Presumably part of the relief came with chatter that talks between the U.S. and Mexico continue on a positive note (see below).
Early negotiated cash fed cattle sales were $2 lower on a live basis at $114-$115/cwt. in Nebraska and the western Corn Belt. Dressed sales were $2-$3 lower at $183-$184.
Except for 25¢ lower in spot Jun, Live Cattle futures closed an average of 31¢ higher.
Feeder Cattle futures closed narrowly mixed, but mostly lower (an average of 12¢ lower to an average of 5¢ higher).
Wholesale beef values were steady on moderate demand and offerings, according to the Agricultural Marketing Service.
Choice boxed beef cutout value was 14¢ higher Thursday afternoon at $222.25/cwt. Select was 2¢ lower at $207.16.
Corn futures closed 5¢ higher through Jul ’20 and then mostly 1¢ to 2¢ higher.
Soybean futures closed fractionally lower to 1¢ lower.
Major U.S. financial indices closed higher Thursday. Key support was attributed to news that talks are progressing between the U.S. and Mexico, regarding illegal immigration from that country, and that threatened tariffs by the U.S. may be postponed.
The Dow Jones Industrial Average closed 181 points higher. The S&P 500 closed 17 points higher. The NASDAQ was up 40 points.
Grading percentages and carcass weights continue to suggest market currentness.
Carcass quality in May was higher year over year with an average of 78.36% grading Choice and Prime, which was 1.13% more than the previous year. However, the average was 1.86% less month to month—compared to a decline of 0.84% the previous year.
As for carcass weights, after catching up and surpassing year over year levels for several weeks, average dressed steer weights sunk to 842 lbs. the week ending May 25, the lightest of the year. Though a seasonal decrease is unsurprising, dropping 7 lbs. from the previous week and 6 lbs. from the previous year speaks to heavy, timely marketing.
Also positive, as reported previously, beef in freezers as of Apr. 30 totaled 430.35 million lbs. That was 5% less (-40.8 million lbs.) than the previous month and 9% less than the previous year, according to the monthly USDA Cold Storage report.
“This is the lowest cold storage number since June of 2017,” according to analysts with the Livestock Marketing Information Center (LMIC), in the latest Livestock Monitor. “Seasonally, beef in cold storage typically declines in the first five months of the year and remains there through the summer quarter before inventories build again in September through the end of the year. Another decline in May might take inventories back to the lowest levels since 2014. These smaller levels in cold storage point to several positive signs for the beef industry.”
For one thing, LMIC analysts point to the fact that the inventory of beef in cold storage is declining more aggressively than last year, despite increased beef production and reduced beef exports.