Cattle Current Daily—March 16, 2023

Cattle Current Daily—March 16, 2023

Too many black swans in too little time tends to make folks cautious. That seems to be as apt an explanation as any for eroding Cattle futures and then cash fed cattle prices in the face of such positive market fundamentals.

In this case, the next feared black swan appears to be a potential contagion of bank failures. Silcon Valley Bank failed last week. Signal bank followed suit quickly after — the third largest bank failure in U.S. history, according to various sources. Then came speculation/news yesterday that Credit Suisse, across the pond, was on the ropes with its largest investor unwilling to provide more funding.

Major U.S. financial indices fell sharply before regaining some lost ground later yesterday when the Swiss Financial Market Supervisory Authority (FINMA) and Swiss National Bank (SNB) — the nation’s central bank — issued a joint statement, saying in part: “The Swiss Financial Market Supervisory Authority (FINMA) and the Swiss National Bank assert that the problems of certain banks in the USA do not pose a direct risk of contagion for the Swiss financial markets … In addition, the SNB will provide liquidity to the globally active bank if necessary.”

By the time the statement was issued, the die was cast for Cattle futures.

Feeder Cattle futures closed an average of $2.04 lower.

Live Cattle futures closed an average of $1.15 lower.

Corn futures closed mostly 2¢ lower.

KC HRW Wheat closed fractionally higher to 2¢ higher.

Soybean futures closed mostly 12¢ to 13¢ lower.

Negotiated cash fed cattle trade ranged from limited on moderate demand in the Southern Plains to moderate on moderate demand in Nebraska to light on moderate demand through Wednesday afternoon, according to the Agricultural Marketing Service.

So far this week, live prices are mainly $1 lower at $164/cwt. in the Southern Plain and Nebraska, where dressed sales were $1 lower at $264.

Although too few to trend, there have been some sales in the western Corn Belt at $164.00-$164.50 on a live basis and $263-$264 in the beef. Prices there last week were $164-$167 and $265, respectively.

Choice boxed beef cutout value was $1.64 lower Wednesday afternoon at $284.27/cwt. Select was $1.93 lower at $272.63/cwt.

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As mentioned above, worries about failing banks cast a pall over major U.S. financial indies Wednesday.

The Dow Jones Industrial Average closed 280 points lower. The S&P 500 closed 27 points lower. The NASDAQ was up 5 points.

West Texas Intermediate Crude Oil futures (CME) closed $3.63 to $3.75 lower lower through the front six contracts. 

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Americans are buying more fresh meat than before the COVID-19 pandemic and are seeking value in terms of price, convenience and better-for attributes in meat purchases, according to the 18th annual Power of Meat report released by the Meat Institute and FMI—The Food Industry Association.

Self-described “meat eaters” comprise 78% of Americans, compared to just 7% who describe themselves as vegan or vegetarian. Shoppers spend more than $15 in the meat department per trip and average nearly one trip to the meat department per week (up nearly 5% since 2019). While 50% of shoppers get their meat from a supermarket, many turn to supercenters (35%), club stores (4%) and hard discounters (5%) for their meat purchases.

Despite rising food and beverage prices over the past year, consumers did not significantly change the amount of meat they buy (down just 2.5% by volume compared to 2021). Product quality and appearance continue to be the top factors driving meat purchase decisions, followed by price per pound and total package price.

To save money, a large majority of consumers (76%) report they made changes to the amount, type, cut, and/or brand of meat they purchase or changed where they shop. Consumers’ top strategies to save money include: buying only the amount needed (42%), looking for coupons (35%), and stocking up when meat is on sale (35%). Seventeen percent said they buy less meat with organic, grass-fed, or other claims. Only 16% of meat shoppers said they cook more meatless meals to save money. Of the 33% of Americans who said they are looking to eat less meat or chicken, 52% cite cost as the reason (up from 16% in 2020).

2023-03-15T19:38:52-06:00

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