In light trade on Thursday, negotiated cash fed cattle prices were mostly steady with the previous day’s higher prices: mainly around $120/cwt. on a live basis and at $180-$190 in the beef.
Recent strength in cash prices added firmness to Cattle futures Thursday, amid light trade.
Live Cattle futures closed an average of 46¢ higher (7¢ to 92¢ higher).
Except for 2¢ higher in two contracts, Feeder Cattle futures closed unchanged to 37¢ lower.
On average, analysts surveyed by Urner Barry and reported by the Daily Livestock Report, expect April placements to be 22.9% less than a year earlier, April marketings to be 25.4% less and cattle on feed to be 5% less, for feedlots with 1,000 head or more capacity. The monthly Cattle on Feed report is due out Friday afternoon.
Wholesale beef values continue to decline as packing capacity continues to return (see below).
Choice boxed beef cutout value was $2.23 lower Thursday afternoon at $401.81/cwt. Select was $8.65 lower at $382.53.
The average dressed steer weight was 896 lbs. the week ending May 9, according to USDA’s weekly Actual Slaughter Under Federal Inspection report. That was 3 lbs. heavier than the previous week and 44 lbs. heavier than the same week last year. The average dressed heifer weight was 829 lbs., which was 3 lbs. heavier than the prior week and 35 lbs. heavier than the previous year.
Corn futures closed fractionally lower to 1¢ lower.
Soybean futures closed 7¢ to 11¢ lower through Jan ’21 and then mostly 1¢ to 3¢ lower.
Major U.S. financial indices closed lower Thursday, with pressure including more political saber rattling between the U.S. and China, as well as continued massive unemployment claims.
The advance figure for seasonally adjusted initial unemployment insurance claims for the week ending May 16 was 2.44 million, according to the U.S. Department of Labor. That was a decrease of 249,000 from the previous week’s revised level.
The Dow Jones Industrial Average closed 101 points lower. The S&P 500 closed 23 points lower. The NASDAQ closed 90 points lower.
“The recent declines in the boxed beef cutout value coincide with continued improvement in processing totals,” says Josh Maples, Extension livestock economist at Mississippi State University, in the May 18 issue of In the Cattle Markets. “The Estimated Daily Slaughter report showed an estimate for last week at 499,000 head. While still 25% lower than a year ago, this would be a 10% improvement over the week prior. Perhaps more importantly, it would mark the second consecutive weekly increase after five straight weeks of declines. A continuing loosening of the logjam at the processing sector is critical to the cattle and meat sector and would support increased cattle slaughter and increased beef availability.”
Total cattle slaughter under federal inspection in April was 2.19 million head, which was 599,700 head fewer (-21.50%) than the previous year, according to USDA’s monthly Livestock Slaughter report (LSR). Of those, total fed steer and heifer slaughter of 1.65 million head was 552,500 head fewer (-25.04%).
On the other end of the trade, Maples notes the significant decline in boxed beef sales for delivery beyond 22 days.
Based on the weekly USDA National Comprehensive Boxed Beef Cutout report, Maples explains the average weekly number of loads sold during the past five weeks was 4,675, which was 32% less than the same time period last year. Negotiated sales for delivery within 21 days were 18% less, while negotiated sales for delivery at 22 days or more declined 64% and forward contract sales declined 65%.
Federally inspected beef production in April was 1.78 billion lbs., which was 452 million pounds less (-20.23%) than a year earlier, according to the LSR. Total federally inspected red meat production for the month of 3.81 billion lbs. was 696 million lbs. less (-15.42% ) than last year.
“Given the uncertainty about both available supply and expected demand, it is likely not surprising that sales for delivery further into the future have shown the biggest decline,” Maples says.