Cattle Current Daily—May 6, 2020

Cattle Current Daily—May 6, 2020

The week’s negotiated cash fed cattle trade was off to a slow start through Tuesday afternoon. Although too few transactions to trend, AMS reported sales in Nebraska and the western Corn Belt across a broad range at $95/cwt. on a live basis and at $145-$170 in the beef.

On the other end of the trade, wholesale beef values continued higher with temporary beef scarcity seen in reports of some retailers limiting beef purchases per customer and some burger joints plumb running out.

Choice boxed beef cutout value was $18.77 higher Tuesday afternoon at a $428.82/cwt. Select was $33.88 higher at $410.54.

Cattle futures closed narrowly mixed Tuesday, as traders try to make sense of all the above, relative to a few weeks and a few months down the road.

After $1.60 lower in spot Jun, Live Cattle futures closed from 65¢ lower to 50¢ higher.

Feeder Cattle futures closed from an average of 36¢ lower to an average of 21¢ higher.  

Corn futures closed fractionally higher to 2¢ higher through the front four contracts and then fractionally lower to 1¢ lower.

Soybean futures closed fractionally higher to 4¢ higher through the front five contracts and then 2¢ to 6¢ lower.

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Major U.S. financial indices extended gains Tuesday, with investors apparently more optimistic about the U.S. economy starting to crank up again, albeit ever so slowly.

Crude oil prices also suggested more confidence with West Texas Intermediate on the CME closing $2.76 to $4.17 higher through the front six contracts.

The Dow Jones Industrial Average closed 133 points higher. The S&P 500 closed 25 points higher. The NASDAQ closed 98 points higher.

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U.S. restaurant chain transactions for the week ending Apr. 26 improved for the second consecutive week with total industry customer transactions down 32% year over year, compared to a 36% decline the prior week. That’s according to The NPD Group (NPD).

More specifically, transactions at quick service restaurants that week were 30% less year over year. Full service restaurant transactions were 71% less, improving by 1% week to week, according to CREST Performance Alerts, which provides a rapid weekly view of chain-specific transactions and share trends for 70 quick service, fast casual, midscale, and casual dining chains. 

“Government relief payments and overall improvement in consumer spending most likely contributed to the easing of transaction declines,” says David Portalatin, NPD food industry advisor. “Looking to next week, we might anticipate the upward trend continuing as restaurants begin to reopen their dining rooms.”

Georgia’s 20,000 restaurants were allowed to reopen on April 27.  From May 1-3, several other states followed suit, most notably Texas with almost 60,000 restaurants.  Over the next two weeks there are over 300,000 restaurants that may potentially reopen for on-premise dining.  These openings will improve industry volume but won’t return it to full capacity. In Texas, for example, reopening comes with strict social distancing guidelines, and dining rooms may not exceed 25% of their standard occupancy. 

“As states and localities reopen, many restaurants are ready to open on the first day, while others need more time to prepare. Still unknown is the number of restaurants that may never reopen,” says Portalatin. “Other considerations are that many consumers may be cautious about returning to dining rooms; and a significant percentage of the population would remain in quarantine even if restrictions were lifted.”

2020-05-05T20:30:51-05:00

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