Cattle futures softened Tuesday with limited interest and light trade.
Live Cattle futures closed an average of 33¢ lower, except for unchanged in away Dec.
Feeder Cattle futures closed an average of 94¢ lower (45¢ to $1.52 lower)
Negotiated cash fed cattle trade ranged from mostly inactive on light demand to a standstill through Tuesday afternoon, with too few transactions to trend, according to the Agricultural Marketing Service.
Last week, FOB live prices were $178/cwt. in all regions and dressed prices were $282.
Choice boxed beef cutout value was 6¢ higher Tuesday afternoon at $295.81/cwt. Select was $2.18 lower at $268.77/cwt.
Soybean futures closed mostly 7¢ to 11¢ higher, leading grains higher.
Corn futures closed mostly 1¢ to 2¢ higher.
KC HRW Wheat futures closed 4¢ to 6¢ higher.
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Major U.S. financial indices closed lower Tuesday, pressured by weaker retail sales and hawkish comments from the Federal Reserve regarding interest rates.
“Risks around the inflation forecast were seen as skewed to the upside, given the possibility that inflation might prove to be more persistent than expected or that additional adverse shocks to supply conditions might occur,” according to minutes from the last FOMC meeting. “… Participants noted that further tightening of monetary policy would be appropriate if incoming information indicated that progress toward the Committee’s inflation objective was insufficient.”
The Dow Jones Industrial Average closed 62 point lower. The S&P 500 closed 9 points lower. The NASDAQ was down 84 points.
West Texas Intermediate Crude Oil futures (CME) closed marginally mixed through the front six contracts.
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Global beef trade is in the midst of transition as weather and cattle cycles drive beef production lower in the United States and higher in the Southern Hemisphere, according to a new Rabobank report.
Domestically, beef cow herd liquidation continues, fueled by drought and strong cattle prices. As production declines, Angus Gidley-Baird, Rabobank senior analyst, animal protein, explains exports will decline while the need for imports increase. Rabobank anticipates a 4.5% contraction in domestic beef production and a 3% decrease in consumption next year, amplifying the nation’s status as a net beef importer.
Conversely, beef production is rising in Australia, due to the cattle cycle there, drier conditions and liquidation of surplus stock, according to the report. Brazilian beef production also continues to increase. Gidley-Baird explains increased beef production from these and other countries will not offset production declines in Canada and the U.S.
“The volume balance for the major beef producing and consuming regions of the world (that we track) will remain relatively constant in 2024,” says Gidley-Baird.
Meanwhile, Rabobank expects aggregated consumption levels to drop by 1%, with gains in countries such as China, South Korea, and Brazil unable to offset declines in countries like Canada and the U.S.