Cattle Current Daily-Nov. 1, 2018

Cattle Current Daily-Nov. 1, 2018

Only 209 head were offered in the weekly Fed Cattle Exchange Auction on Wednesday—no takers.

Cattle futures closed higher Wednesday, led by Feeder Cattle. Increasing wholesale beef values continued to provide support, as did increasing open interest and expectations for cash fed cattle prices this week to be at least steady with last week’s higher level.

After $1.95 higher in expiring Oct, Live Cattle futures closed an average of 40¢ higher, except for an average of 14¢ lower in two contracts.

Feeder Cattle futures closed an average of $1.35 higher (97¢ to $2.02 higher).

Wholesale beef values were higher on moderate to good demand and moderate offerings, according to the Agricultural Marketing Service.

Choice boxed beef cutout value was $1.33 higher Wednesday afternoon at $216.93/cwt. Select was $1.15 higher at $204.03.

*******************************

Major U.S. financial indices closed sharply higher Wednesday, for a second consecutive day. Support included better than expected quarterly earnings from the likes of General Motors and Facebook.

The Dow Jones Industrial Average closed 241 points higher. The S&P 500 closed 29 points higher. The NASDAQ was up 144 points.

*******************************

African Swine Fever (ASF) could impact U.S. beef markets a couple of ways.

On one hand, and arguably, strength in Lean Hog futures in recent weeks can be attributed at least partly to speculation that the ASF outbreak in China and other countries will mean more international demand for U.S. pork, ultimately.

“The U.S. produces approximately 32% of world pork exports,” explains Brenda Boetel, an Extension economist at the University of Wisconsin-River Falls, in the latest issue of In the Cattle Markets. “U.S. pork export quantities have increased in 2018, although prices have not held up as well. One country where U.S. export quantities have decreased steadily since April 2018 is China. China imports approximately 26% of the world trade, and in September 2018 China increased pork imports by 8.4% over September 2017. Yet, volume of U.S. pork exports to China and Hong Kong are down 9% from 2017. Given the African Swine Fever issues in China, and increasing Chinese demand for pork, one can assume the decrease in U.S. exports to China is related to tariff issues.”

On the other hand, U.S. pork exports could suffer if ASF to occur in this nation.

“Given that the U.S. will produce over 26 billion lbs. of pork in 2018, and over 22% will be exported, an incident of ASF in the U.S. would be challenging with regionalization and devastating without regionalization. Should the U.S. become infected with ASF, the impact on pork prices would be severe even if we can keep some of our export trade with regionalization.”

Regionalization refers to the notion of countries not infected with ASF or some other Foreign Animal Disease, continuing to accept exports from uninfected regions within ‘infected’ countries.

“The incidence of ASF in China has both the potential to increase U.S. pork exports, if we can work out a trade agreement with China to lower tariffs on U.S. pork, while also providing huge risk should ASF make the jump to the US,” Boetel says. “Cattle producers need to pay attention, as significant changes in pork prices will impact beef prices and eventually cattle prices.”

2018-10-31T20:27:18-05:00

This Is A Custom Widget

This Sliding Bar can be switched on or off in theme options, and can take any widget you throw at it or even fill it with your custom HTML Code. Its perfect for grabbing the attention of your viewers. Choose between 1, 2, 3 or 4 columns, set the background color, widget divider color, activate transparency, a top border or fully disable it on desktop and mobile.

This Is A Custom Widget

This Sliding Bar can be switched on or off in theme options, and can take any widget you throw at it or even fill it with your custom HTML Code. Its perfect for grabbing the attention of your viewers. Choose between 1, 2, 3 or 4 columns, set the background color, widget divider color, activate transparency, a top border or fully disable it on desktop and mobile.

This Is A Custom Widget

This Sliding Bar can be switched on or off in theme options, and can take any widget you throw at it or even fill it with your custom HTML Code. Its perfect for grabbing the attention of your viewers. Choose between 1, 2, 3 or 4 columns, set the background color, widget divider color, activate transparency, a top border or fully disable it on desktop and mobile.

This Is A Custom Widget

This Sliding Bar can be switched on or off in theme options, and can take any widget you throw at it or even fill it with your custom HTML Code. Its perfect for grabbing the attention of your viewers. Choose between 1, 2, 3 or 4 columns, set the background color, widget divider color, activate transparency, a top border or fully disable it on desktop and mobile.