Cattle futures closed mostly higher again Friday with follow-through support from the week’s surging cash fed cattle prices.
Live cattle futures closed an average of $1.16 higher (12¢ higher toward the back to $3.40 higher at the front), except for 2¢ lower in away Aug.
Feeder Cattle futures closed an average of 61¢ higher (5¢ higher at the back to $1.00 higher at the front).
Week to week on Friday, Live Cattle futures closed an average of $6.27 higher ($3.15 higher toward the back to $10.82 higher in spot June). Feeder Cattle futures closed an average of $9.79 higher ($6.92 higher at the back to $11.42 higher toward the front).
Negotiated cash fed cattle trade was light on very good demand in all major cattle feeding regions through Friday afternoon, according to the Agricultural Marketing Service.
Although too few transactions to trend, there were some FOB live trades in the Texas Panhandle at $232/cwt., which was steady with the previous day and $9 higher than the previous week.
FOB live prices in Kansas were $5 higher than Thursday at $235, which was $13 more than the previous week.
In Nebraska, FOB live prices were $2-$3 higher than Thursday at $242-$244, which was $7 higher than the previous week. Dressed delivered prices for the week were $10-$15 higher at $380.
In the western Corn Belt, FOB live prices were $3-$10 higher at $240, while dressed delivered prices were $9 higher at $380.
Choice boxed beef cutout value was $1.77 lower Friday afternoon at $365.08. Select was 12¢higher at $356.73. Week to week on Friday, Choice was $1.26 lower and Select was 8¢ higher.
Estimated total cattle slaughter last week of 582,000 head was 105,000 head more than the previous week but 28,000 head fewer than the same week last year. Estimated total year-to-date cattle slaughter of 12.9 million head was 847,000 head fewer (-6.2%) than the same time last year. Estimated year-to-date beef production of 11.2 billion pounds was 328.2 million pounds less (-2.8%).
Turning to the grain complex, Grain and Soybean futures mostly extended gains Friday with support from announced trade talks between the U.S. and China, and perhaps some inkling of a weather premium.
Corn futures closed mostly fractionally higher to 1¢ higher. Kansas City Wheat futures closed 5¢ to 7¢ higher. Soybean futures closed mostly 3¢ higher.
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Major U.S. financial indices closed higher Friday, buoyed by stronger job growth than expected.
Total nonfarm payroll employment increased by 139,000 in May, according to the U.S. Bureau of Labor Statistics. The unemployment rate was unchanged at 4.2%.
Average hourly earnings for all employees on private nonfarm payrolls rose by 15¢, or 0.4%, to $36.24 in May. Over the past 12 months, average hourly earnings have increased by 3.9%.
The Dow Jones Industrial Average closed 443 points higher. The S&P 500 closed 61 points higher. The NASDAQ was up 231 points.
West Texas Intermediate Crude Oil futures (CME) closed 79¢ to $1.21 higher through the front six contracts.
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U.S. beef exports lost ground in April, due in part to China’s retaliatory tariffs and that nation’s failure to renew establishment registrations for U.S. beef plants and cold storage facilities, the majority of which expired in mid-March.
April U.S. beef exports of 100,659 metric tons (mt) in April were 10% less than a year earlier, while value fell 8% to $824.5 million, according to data released by USDA and compiled by the U.S. Meat Export Federation (USMEF). For January through April, beef exports were 3% below last year’s pace at 411,027 mt. Export value was down just 1% to $3.35 billion.
Exports to China declined nearly 70% and shipments also trended lower to Mexico, Taiwan and the Middle East. These results were partially offset by larger exports to South Korea, Japan and Central and South America.
“We expected beef shipments to China to hit a wall in April, due to the one-two punch of higher tariffs and expired plant registrations,” says Dan Halstrom, USMEF President and CEO. “We are hopeful that these issues will be resolved soon and are encouraged by this week’s developments on trade negotiations with China. In the meantime, USMEF remains committed to market diversification and we have accelerated efforts to develop alternative destinations for cuts and variety meat items normally shipped to China.”
China’s total duties on U.S. beef peaked in April at 147%. The rate was lowered to 32% on May 14 when the U.S. and China agreed to a temporary de-escalation to allow for further negotiations. (Product that shipped prior to April 10 was allowed to clear without the additional 125%, provided it arrived by May 13.) President Trump spoke with Chinese President Xi Jinping on June 5 and said further talks will be held soon.
April beef exports equated to $396.71 per head of fed slaughter, down 5% from a year ago. The January-April per-head average was still up 1% to $415.16.
For broader perspective, U.S. pork exports totaled 237,250 mt in April, down 15% from a year ago and the lowest in 10 months. Export value fell 13% to $675.3 million. Exports to China, which are mainly pork variety meats, declined 35% from a year ago.