Negotiated cash fed cattle prices perked up another $1-$3 on Thursday with light to moderate trade and demand, according to the Agricultural Marketing Service.
Live prices were $1 higher in the Southern Plains at $132/cwt., $1-$2 higher in Nebraska at $133-$134 and $1-$3 higher in the western Corn Belt at $133. Dressed trade was $3 higher at $210. Live prices in Colorado last week were at $132.
Stronger cash prices helped push Cattle futures higher.
Feeder Cattle futures closed an average of $1.90 higher, except for 15¢ lower in nearly spent Nov.
Live Cattle futures closed an average of 70¢ higher.
Lower grain futures prices added support.
Corn futures closed narrowly mixed, from 2¢ lower to 1¢ higher.
Soybean futures closed mostly 11¢ to 15¢ lower.
Wholesale beef prices continued to drift lower. Choice boxed beef cutout value was $3.66 lower Thursday afternoon at $278.47/cwt. Select was $2.53 lower at $264.06/cwt.
Net U.S. beef export sales of 25,500 metric tons (2021) for the week ending Nov. 11 were 23% more than the previous week and 58% more than the prior four-week average, according to the U.S. Export Sales report. Increases were primarily for China, Taiwan, Japan, South Korea, and Mexico.
Major U.S. financial indices closed narrowly mixed Thursday.
Weekly initial unemployment claims decreased by 1,000 to 268,000 for the week ending Nov. 13, according to the U.S. Department of Labor. That was in line with trader expectations.
The Dow Jones Industrial Average closed 60 points lower. The S&P 500 closed 15 points higher. The NASDAQ was up 72 points.
Rabobank analysts expect operational beef packing capacity and cattle numbers to regain some relative balance by the second quarter of next year.
“Although packers will still have healthy margins compared to pre-pandemic levels, the price spread between beef and cattle will begin a multi-year narrowing trend in 2022,” say Rabobank analysts, in the recent Rabobank Global Animal Protein Outlook 2022. “Even as domestic beef demand (willingness to pay) falls slightly from its pandemic highs, continued export growth, declining beef production and general economic inflation will provide price support.”
Along those same lines, Don Close, Rabobank senior animal protein analyst notes North American feed costs are expected to remain at high levels. “Producers will need to be vigilant in finding opportunities to lock in profitable margins,” he says.
Animal protein supply chains face across-the-board cost inflation with the most significant increases coming in four key areas – animal feed, labor, energy and freight, according to the report.
“This next year has the potential to accelerate structural change as a result of escalating costs,” says Christine McCracken, senior animal protein analyst for Rabobank. “Success will most likely go the players that adapt to the changing business environment; embracing consumer preferences for sustainability and preparing for a surge in demand as economies continue to reopen and adjust following COVID-19-induced lockdowns.”