Despite lower cash fed cattle prices the previous day and heavy pressure in Lean Hog futures, Live Cattle futures traded mostly sideways Thursday. Feeder Cattle inched higher, amid continued light trade.
Live Cattle futures closed narrowly mixed (20¢ lower to 35¢ higher).
Except for 15¢ lower and unchanged at either end of the board, Feeder Cattle futures closed an average of 43¢ higher.
Corn futures closed mostly fractionally higher through Mar ’21, and then 3¢ to 5¢ higher
After 1¢ to 2¢ higher in the front four contracts, Soybean futures closed mostly fractionally lower to 1¢ lower.
Wholesale beef values were lower on light to moderate demand and offerings, according to the Agricultural Marketing Service.
Choice boxed beef cutout value was $1.55 lower Thursday afternoon at $227.44/cwt. Select was $1.01 lower at $219.52.
Major U.S. financial indices bounced higher Thursday, with many crediting various reports of progress in trade talks between the U.S. and China.
The Dow Jones Industrial Average closed 91 points higher. The S&P 500 closed 10 points higher. The NASDAQ was up 25 points.
U.S. beef exports remained robust in January, but the lack of progress in trade talks with various countries—the growing tariff disadvantage with competitors—started to show.
U.S. beef exports declined by 1% in January to 4,766 metric tons (mt), compared to the previous year, but beef export value increased 3% to $642.3 million. That’s according to statistics released by USDA and compiled by the U.S. Meat Export Federation (USMEF).
Export value per head of fed slaughter pulled back from last year’s record pace, averaging $284.86, down 3% from a year ago.
Japan and South Korea set the pace for U.S. beef exports.
Japan imported 8% more U.S. beef year-over-year (25,925 mt), valued at $167 million, which was 12% more than the same time a year earlier.
January was the first full month U.S. beef competitors received tariff relief in Japan under the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) with the import duty rate dropping from 38.5% to 27.5% on Dec. 30, 2018. This gap will widen further on April 1, when the rate for CPTPP countries drops to 26.6%.
“It’s great to see Japan’s demand for U.S. beef increase in January despite these tariff rate changes for our major competitors,” says Dan Halstrom, USMEF president and CEO. “But this disadvantage will become more and more pronounced over time, so negotiations toward a U.S.-Japan trade agreement cannot come soon enough. The playing field needs to be leveled as quickly as possible so that the U.S. industry can continue to capitalize on booming meat demand in Japan.”
South Korea imported 4% more U.S. beef in January (17,900 mt), on the heels of its record imports last year. Export value was 10% more at $134.3 million.