Negotiated cash fed cattle trade ended up $2 lower on a live basis last week in Nebraska and the Southern Plains at $113/cwt. It was $1 higher to $2 lower in the western Corn Belt at $113-$115. Dressed trade was $5 lower in Nebraska at $180-$182; steady to $5 lower at the same money in the western Corn Belt.
Cattle futures dropped like a rock again Friday.
Live Cattle futures closed an average of $2.42 lower ($1.82 lower at the back to $2.90 lower in spot Apr).
Spot Apr Live Cattle closed at $105.75 on Friday. That’s $22.20 less (-17.35%) than the recent high of $127.95 Jan. 10 and lower than the $110.17 shortly after the Tyson plant fire.
Feeder Cattle futures closed an average of $3.36 lower.
Spot Mar Feeder Cattle closed at $130.70 on Friday, which was $16.75 less (-11.36%) than the recent high Jan. 10, but still slightly higher than the first week of September.
Wholesale beef values were steady on Choice and higher on Select with moderate to fairly good demand and light to moderate offerings, according to the Agricultural Marketing Service.
Choice boxed beef cutout value was 22¢ higher Friday afternoon at $207.47/cwt. Select was $1.51 higher at $202.57.
Corn futures closed 1¢ to 7¢ lower through May ’21 and then fractionally higher to 1¢ higher.
Soybean futures closed 2¢ to 5¢ lower through Jan ’21 and then mostly 2¢ to 3¢ higher.
Major U.S. financial indices continued to extend losses Friday as the number of COVID-19 cases and deaths escalated in the U.S. and around the world.
That was despite a U.S. employment report that was significantly more positive than the trade expected.
Total nonfarm payroll employment rose by 273,000 in February, according to the U.S. Bureau of Labor Statistics. The unemployment rate was little changed at 3.5%. Average hourly earnings for all employees on private nonfarm payrolls in February increased by 9¢ to $28.52. Over the past 12 months, average hourly earnings increased by 3.0%.
The Dow Jones Industrial Average closed 256 points lower. The S&P 500 closed 51 points lower. The NASDAQ was down 162 points.
Crude Oil futures—West Texas Intermediate on the CME—closed $3.90 to $4.62 lower through the front six contracts. Those contracts were an average of $11.48 lower over the past two weeks.
Although there’s no way to estimate the eventual long-term economic implications of COVID-19, Aaron Smith, crop marketing specialist at the University of Tennessee suggests a couple of areas that bear watching.
“First, the disruption to global markets and consequently exports of agricultural products may be substantial and could get worse,” says Smith, in his weekly market comments. “For agricultural commodities and products, both logistical issues and economic activity are at the forefront of trade issues. Getting vessels loaded or unloaded at ports can be problematic (both domestically and internationally). For example, there can be challenges with refrigeration units as a limited number of places to “plug in” large containers are available at importing ports. This could create issues with unloading ships and may result in perishable cargos being rendered unusable. From an economic activity standpoint, the restrictions to travel and the quarantining of some cities/regions reduces consumer spending (affecting economic growth/GDP) as dollars are not circulated in economies and thus impact demand for agricultural products. This is an oversimplification of very complex economic systems, but it is worthwhile to consider the short and long-term implications on US agricultural exports.”
Further, Smith says securing agricultural inputs produced in China could become a challenge for the upcoming planting season.
“The longer logistical disruptions continue, the greater the strain could be on domestic supplies of certain agricultural (and non-agricultural) inputs. This also may have longer term consequences as large multinational companies evaluate supply chains and risks,” Smith says.