Cattle futures sagged on Friday. Pressure included higher Corn and Soybean futures, sharply lower boxed beef prices and static cash prices. Still, it was hard to square the degree of decline with fundamentals.
Feeder Cattle futures closed an average of $2.13 lower ($1.32 lower at the back to $3.12 lower toward the front).
Live Cattle futures closed an average of $1.00 lower (52¢ lower at the back to $1.77 lower toward the front).
Negotiated cash fed cattle trade ranged from limited on light demand to mostly inactive on very light demand through Friday afternoon, with too few transactions to trend, according to the Agricultural Marketing Service.
For the week, live prices were steady in the Southern Plains at $150, steady to $3 lower in Nebraska at $150-$153 and steady to $2 higher in the western Corn Belt at $153-$155. Dressed prices were steady to $2 higher at $242.
Estimated total cattle slaughter last week of 671,000 head was 4,000 head more than the previous week and 12,000 head more than the same week last year. Year-to-date estimated total cattle slaughter of 29.38 million head was 464,000 head more (+1.6%) than the same time last year. Year-to-date estimated beef production of 24.25 billon lbs. was 350 million lbs. more (+1.5%).
Choice Boxed beef cutout value was $4.33 lower Friday afternoon at $258.94/cwt. Select was $1.56 lower at $235.27/cwt.
Grain and Soybean futures rebounded Friday, helped along by the significant decline in the U.S. dollar in the latter part of the week, making U.S. exports more competitive.
Corn futures closed mostly 2¢ to 3¢ higher through Jly ‘24, and then mostly fractionally higher.
Soybean futures closed mostly 18¢ to 25¢ higher.
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Major U.S. financial indices edged higher Friday, maintaining the previous session’s steep gains, tied to thoughts inflation may be easing.
The Dow Jones Industrial Average closed 32 points higher. The S&P 500 closed 36 points higher. The NASDAQ was up 209 points.
West Texas Intermediate Crude Oil futures (CME) closed $2.32 to $2.50 higher through the front six contracts.
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Although challenging times lie ahead, Dan Halstrom, president and CEO of the U.S. Meat Export Federation (USMEF) says market diversification helped keep beef exports on a record pace through the first three quarters of this year.
Speaking to participants at the USMEF Strategic Planning Conference in Oklahoma City last week, Halstrom explained market diversification has long been an organization priority. He noted that the often-tense relationship between the U.S. and China underscores the importance of this strategy. Halstrom explained that while China is a major U.S. red meat customer, on pace to purchase $4 billion in U.S. beef and pork this year, the U.S. is not nearly as dependent on China as most other suppliers.
“Uruguay exports 58% of its beef production to China, New Zealand 44%, Brazil 18% and Australia 14%,” Halstrom said. “But even with our recent growth, just 3% of U.S. beef production is exported to China.”
Halstrom cited several mounting obstacles for U.S. exports, including global inflation, ongoing supply chain challenges and the strengthening U.S. dollar. As an example, Halstrom noted that devaluation of the Japanese yen has pushed prices for U.S. meat products 30% higher than a year ago in an extremely competitive market.
“Global demand is strong, even record-breaking, despite rising prices,” said Halstrom, “But at what point do international consumers scale back?”