Wholesale beef prices gained on Friday heading into the unofficial start of grilling season. Choice Boxed beef cutout value was $1.45 higher Friday afternoon at $265.42/cwt. Select was $2.07 higher at $246.50.
Firmer beef prices helped Live Cattle futures close an average of 22¢ higher, except for an average of 18¢ lower in the front three contracts and unchanged in Apr. They were an average of 48¢ higher week to week on Friday.
Feeder Cattle futures closed an average of 67¢ lower, from 35¢ lower in new spot Aug to $1.02 lower, amid continued light trade and under pressure from higher Corn futures once gain. However, Feeder Cattle futures closed an average of $2.53 higher week to week on Friday, despite the previous week’s bearish Cattle on Feed report.
Corn futures closed 10¢ to 12¢ higher through Jly ‘23, and then mostly 4¢ higher, presumably helped along by dry weather in South America. Soybean futures closed mostly 2¢ to 4¢ higher.
Negotiated cash fed cattle trade ranged from limited on light demand to mostly inactive on light demand through Friday afternoon, according to the Agricultural Marketing Service.
For the week, live prices were $1 lower in the Southern Plains at $137/cwt., steady to $2 lower at $140 in Nebraska and $140-$142 in the western Corn Belt. Dressed prices were $3 lower in Nebraska at $223. The previous week dressed prices were $223-$227 in the western Corn belt, and live prices in Colorado were $142.
Estimated total cattle slaughter last week of 644,000 head was 36,000 head fewer than the previous week, but 14,000 head more than the same week last year. Estimated year-to-date total cattle slaughter of 13.63 million head was 92,000 head more (+0.7%) than the same period last year. Estimated year-to-date total beef production of 11.36 billion lbs. was 101.5 million lbs. more (+0.9%) than the same time last year.
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Major U.S. financial indices closed sharply higher Friday for the second consecutive session, helped along by one sign of easing inflation.
Core personal consumption expenditure price index, excluding food and energy — closely watched by the Federal Open Markets Committee — was 4.9% higher than a year earlier but eased from year-over-year increases of 5.1% to 5.3% the previous three months.
The Dow Jones Industrial Average closed 575 points higher. The S&P 500 closed 100 points higher. The NASDAQ was up 390 points.
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“The global economic outlook for 2022 remains positive, but previous growth projections are moderated due to trade disruptions, rising energy costs, rising inflation rates, and commenced tightening of monetary policy,” according to the latest quarterly Outlook for U.S. Agricultural Trade from USDA’s Economic Research Service (ERS) and Foreign Agricultural Service (FAS).
Compared to the previous Outlook, ERS and FAS analysts lowered projections for this year’s world gross domestic production to 3.6% from 4.4%.
“The Russian invasion of Ukraine has presented new challenges to global economic growth,” analysts say. “The conflict and resulting response have further elevated energy prices, most immediately impacting the European market. Continued supply chain constraints and complications remain a significant global growth headwind. Central banks are expected to respond to rising inflation rates by implementing contractionary monetary policy. The tightening of monetary policy typically presents challenges to economic growth in the short term.”
U.S. GDP was forecast at 3.7% versus 3.8% in the previous report.
Even so, U.S. agricultural exports in fiscal year (FY) 2022 are forecast at a record $191.0 billion, up $7.5 billion from the February forecast, led by increases in corn, cotton, and soybeans.
Overall U.S. livestock, poultry, and dairy exports are projected to increase by $1.2 billion to $40.4 billion, with gains across all major commodities except pork. Beef and veal exports are projected to increase by $700 million on higher unit values as demand in East Asia is expected to remain firm.
“To date, demand for U.S. red meat has been as strong as I’ve ever seen in all my years in the meat business, and remarkably resilient,” explained Dan Halstrom, president and CEO of the U.S. Meat Export Federation (USMEF) during that organization’s Spring Conference in San Antonio last week. “But the question in my mind is, at what point do these inflationary pressures start to constrict disposable income for the global consumer? At what point will we see a crack in demand?”